beyondbrics

Facing the dilemma of reporting an act of wrongdoing in the workplace? Indian employees, whose attempts to report workplace misconduct often end up jeopardising their jobs, need fret no more: companies are outsourcing whistle-blowing services to third-party consultancies.

While internal complaint channels do exist in some companies, they remain unregulated by any national body, causing problems such as a lack of confidentiality or record-keeping. Independent consultancies have begun to fill in the blanks, citing a growing need among companies to boost credibility as they aim to be globally competitive.

“Indian companies don’t generally have the technical and personnel wherewithal to run such a hotline,” Rohit Mahajan, head of forensic practice at KPMG told beyondbrics. “As companies go global, they identify this as good practice, a good feedback mechanism, because they want to comply with international standards.”

In a country plagued with crippling corruption, whistle-blowers have little protection under existing laws. Companies (officials) said an independent agency running a whistle-blowing service makes individuals more confident to report any concerns without the risk of negative repercussions.

“At our company, internal avenues exist for whistle-blowers, but we’ve augmented that by outsourcing the call-receiving service to a third party,” Vikas Anand, head of group assurance at Sandvik, a Swedish industrial group with a presence in India, told beyondbrics, asking to keep the third party unnamed. “Employees are definitely happier because [an external] hotline provides confidentiality and anonymity to whistle-blowers that internal hotlines don’t always provide.”

Firms like KPMG and Ernst&Young have started offering such services in the past two years to companies in the manufacturing and finance sectors, and are optimistic about growth. As India Inc seeks to be globally competitive, companies are increasingly insisting on independent oversight of corporate practices and audits, though the timeframe to set up relevant regulations at government level remains indefinite.

“India is evolving as an economy. There are regulatory changes happening like acts against money laundering and bribery,” Mahajan said. “In the coming years we will see more companies choosing such good governance practices [like whistle-blowing services] as they go international… but I’m not too sure how soon relevant government regulations [will be set up].”

Related reading:
India warned over governance, FT
Sinking underlines South Korean view of state as monster, FT
India: shouting as governance, beyondbrics