Introduction: Whistleblowing in Corporate Governance

INTRODUCTION
Whistleblowing refers to the divulgence of information about unethical and/or illegal, fraudulent, or corruptive activities going on in an organization to people or entities who can take effective actions to curb these ill-intentioned activities. Transparency International's (TI) definition of whistleblowing covers a wider scope as the disclosure, or reporting of wrongdoing, including, but not limited to corruption; criminal offenses; breaches of a legal obligation; miscarriages of justice; specific dangers to public health, safety or the environment; abuse of authority; unauthorized use of public funds or property; gross waste or mismanagement; conflict of interest; and acts to cover up any of the above. Whistleblowing basically is a step towards uncovering the unethical practices happening behind the closed doors of a corporation or any other organization. This helps in uprooting the evils some people resort to for their own personal benefits. Whistleblowing can happen in the private as well as the public sector.

WHISTLEBLOWER

A person who is divulging the information is known as the whistleblower. They play a major role in unearthing the malpractices of a company. More often than not, a whistleblower is an employee of the company itself. For their claim to succeed, whistleblowers should have solid evidence of the said claim so that they can prove it to be right which in turn can bring a reform within the organization.

TYPES
There are mainly three different types of whistleblowing that can take place. These are Internal whistleblowing, External whistleblowing and Cyber whistleblowing.
●Internal Whistleblowing- This is the most common form of whistleblowing. In this type of whistleblowing, the whistleblower reports the information of misbehavior, fraudulent activities to another party within the organization.
●External Whistleblowing- This happens when a whistleblower reports the information to an external agency which is not related to the corporation. These external agencies can be lawyers, media, governmental agencies or any other organizations which they believe can take action in this regard. When reporting malpractice, personnel must have a legitimate belief that the body to which they are reporting has jurisdiction over the misconduct.
●Cyber Whistleblowing- Occasionally, businesses work with outside organizations to set up a safe, confidential reporting line for their staff members also known as a whistleblower hotline. In addition to safeguarding the identity of the informant, these services aim to alert those at the top of the organizational hierarchy to instances of wrongdoing. Typically, this is achieved by interaction with specific case management software. These types of whistleblowing cases can involve security breaches, insecure practices, encryption deficiencies, and being hacked.

IMPORTANCE OF WHISTLEBLOWERS
Whistleblowing is important for the company as well as the society as it helps uncover various malpractices within an organization, often at an early stage of their happening. Aside from being a legal obligation, it is the moral duty of every citizen to report corrupt or fraudulent practices of an organization to respective agencies that they think can take action in this regard.

Listed below are some of the benefits of whistleblowing:
●It keeps your business safe:

Executives should encourage the majority of workers to voice concerns about possible issues they observe at their company. That is far preferable to the alternative, in which staff members are apathetic about informing you of problems within the company. Strong whistleblowing cultures aid in the detection of a wide range of possible hazards, some of which, like cybersecurity issues, may not even be related to employee wrongdoing.
●It stops misbehaviour:

If there is an apprehension that action will be taken against misbehaviour, then employees will think about doing such acts. This will stop the happening of such illicit acts in the initial stages.
●It's morally right:

At their core, companies have an ethical duty to care for and safeguard the people who work for them. This includes defending staff members who sound the alarm about potential wrongdoing they witness at the company.
●Improved trust and communication:

Scholars have discovered that companies with a strong internal reporting culture and higher internal report volumes than their competitors generally have better business outcomes: lower settlements in cases of litigation, more effective operations, and even fewer bad press headlines.
●Risks and expenses are reduced:

The cost of correcting long-term misconduct will eventually increase. That is true regardless of the type of misconduct: workplace harassment that could result in civil lawsuits, criminal legal violations like bribing government officials, or harmless mistakes that put the company in danger like weak cybersecurity defences. Whistleblowers who are comfortable speaking up help the business save money in the long run.

LEGISLATIONS IN INDIA

The Law Commission of India, in 2003, recommended the adoption of the Public Interest Disclosure (Protection of Informers) Act, 2002, to protect whistleblowers from various challenges after they disclose the information. In August 2010, the Public Interest Disclosure and Protection of Persons Making the Disclosures Bill, 2010 (PIDPIR) was introduced into the Lok Sabha which was approved by the cabinet in June 2011. PIDPIR was renamed as The Whistleblowers' Protection Bill, 2011 by the Standing Committee on Personnel, Public Grievances, Law and Justice. The Whistleblowers' Protection Bill, 2011 was passed by the Lok Sabha on 28 December 2011 and by the Rajya Sabha on 21 February 2014 and it received Presidential assent on 9 May 2014, thus becoming a reality as the Whistleblower Protection Act of 2014.

LEGISLATIONS OUTSIDE INDIA

AMERICA- Section 922 of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) in the United States incentivizes and protects whistleblowers. More acts for whistleblower protection in America include the Patient Protection and Affordable Care Act ("ACA", the Consumer Product Safety Improvement Act ("CPSIA"), the Seaman's Protection Act as amended by the Coast Guard Authorization Act of 2010 ("SPA"), the Consumer Financial Protection Act ("CFPA"), the FDA Food Safety Modernization Act ("FSMA"), the Moving Ahead for Progress in the 21st Century Act ("MAP-21"), and the Taxpayer First Act ("TFA").

UK- In the United Kingdom, the Public Interest Disclosure Act of 1998 (PIDA) provides protection for whistleblowers.

IRELAND- In January 2012, the Irish government pledged to enact a comprehensive law protecting whistleblowers. In 2014, the Protected Disclosures Act (PDA) was enacted.

CONCLUSION
Honesty is the best policy. That's what we have heard since we were growing up. As adults, we sometimes forget it, most often willfully. But when it comes to reporting things that you consider against the morals of society, it should be done without any second thoughts. Whistleblowing is a really important concept which should be introduced in every organization, regardless of their size, throughout the world, especially in the international organization. It not only makes the organization more transparent and successful but also makes the world a better place.

REFERENCES
- DCAF, https://securitysectorintegrity.com/best-practices/whistleblowing/ (last visited Feb 26, 2024).
- Slater+Gordon Lawyers, https://www.slatergordon.co.uk/employment-law-solicitors/whistleblowing/different-types-of-whistleblowing/ (last visited Feb 27, 2024).
- GAN INTEGRITY, https://www.ganintegrity.com/blog/the-importance-of-whistleblowing-in-an-organization/ (last visited Feb 27, 2024).

DISCLAIMER

The author affirms that this article is an entirely original work, never before submitted for publication at any journal, blog or other publication avenue. Any unintentional resemblance to previously published material is purely coincidental. This article is intended solely for academic and scholarly discussion. The author takes personal responsibility for any potential infringement of intellectual property rights belonging to any individuals, organizations, governments, or institutions.
ABOUT THE AUTHOR

The author of this blog is Suhasni Sharma. She is currently a 2nd year student pursuing her B.A.LL.B. degree from The Law School, University of Jammu.