Money & Banking

India Inc wary of disclosing whistleblower plaints

Our Bureau Mumbai | Updated on July 10, 2020 Published on July 10, 2020

Study on 50 NSE-listed firmsshows only 32% revealed details

Only 32 per cent of the top listed companies in India are disclosing whistleblower complaints, according to a study by proxy advisory firm Stakeholder Empowerment Services (SES).

“Only 16 companies disclosed whistleblower complaints. 10 companies did not adequately disclose whether they have mechanisms for whistleblowers – direct access to the Chairperson of the audit committee,” the report stated.

The report, titled the ESG (environment, society and governance by business), is based on study of 50 listed companies on the NSE. These 50 companies belong to 12 industries which SES felt had direct impact on the Environment and Stakeholders due to their business operations. Consciously, IT and banking sectors companies were excluded from the present study due to their indirect impact on the environment, SES said.

The report said while all the companies have disclosed whistleblower policies on their website, only 40 per cent companies disclosed specific information regarding its training or programmes to directors employees for anti-corruption policies and procedures.

Risk management

Companies are lax on risk management policies, too. Only 12 per cent of companies provided data on the number of incidence or complaints regarding data security or privacy breaches. This reflected that either the companies are not centrally tracking all data security, privacy breach concerns or hesitant to publish negative information, SES said.

From attendance data and disclosure of risk policy, it appears that the importance of the Risk Management Committee (RMC) is yet to sink in. Among all committees, RMC had less than 75 per cent attendance in 50 per cent companies, lowest amongst all committees, SES said. Around 36 per cent companies have a non-executive director whose age was above 75 years.

“Companies have largely scored better on policy disclosures followed by governance factor, compared to environment and social factors. This can be attributed to the fact that governance reforms have transformed into laws by various regulatory agencies within India, in the last two decades. Similarly, many policies have been mandated to be prepared by regulatory authorities. Hence, companies have scored higher on policy disclosure parameters,” the report said.

SES said its report was a result of its collective efforts with NSE law firm Cyril Amarchand Mangaldas (CAM) being a knowledge partner solely with respect to the model. NSE provided financial support, guidance, and logistics; SES developed the model, and CAM assisted with vetting the model from a legal standpoint. The report (including data capturing, analysis, findings, and report writing) was solely worked on by the SES team, without any involvement of NSE and CAM.

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Published on July 10, 2020
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