WhistleBlower / Vigil Mechanism

Whistleblower / Vigil Mechanism by Cyforce

What is a Vigil Mechanism?

The term “whistle-blowing” originates from the practice of British policemen who blew their whistles whenever they observed the commission of a crime. Whistleblowing means calling the attention of the top management to some wrongdoing occurring within an organization.
A whistleblower may be an employee, former employee or member of an organisation, a government agency, who has the willingness to take corrective action on the misconduct.
As per Sec.177 of the Companies Act, 2013, certain companies have to establish a Vigil/Whistleblowing mechanism to report any unethical behaviour or other concerns to the management.

According to the Companies Act, 2013 & Rules, 2014 It is mandatory for:
  • • All the listed companies
  • • Companies that accept deposits from the public
  • • Companies which have borrowed money from Banks and PFI in excess of Rs.50 crores under section 177(9) read with Companies (Meetings of Board and its Powers) Rules, 2014.

Companies that are required to constitute an audit committee shall operate the Vigil mechanism through the audit committee and if any of the members of the committee have a conflict of interest in a given case, they should recuse themselves and the others on the committee would deal with the matter on hand.
For other companies, the Board of directors shall nominate a director to play the role of the audit committee for the purpose of Vigil mechanism to whom other directors and employees may report their concerns.
It provides adequate safeguards against victimization of employees and directors who avail of the Vigil mechanism and also provides for direct access to the Chairperson of the audit committee or the Director nominated to play the role of the audit committee, as the case may be, in exceptional cases.

Types of Whistleblower:


A Whistleblower may be within the organization who discloses any illegal, immoral or illegitimate practices to the employer. He/she may be-

  • Employee
  • Superior officer or
  • Any designated officer


A whistleblower may be outside the organization who discloses any illegal, immoral or illegitimate practices to the company. He/she may be-

  • Lawyers
  • Media
  • Law Enforcement
  • Watchdog Agencies

Whistleblower Hotline


  • Stakeholders
  • Key Processes for WB Mechanism
  • Law enforcement
  • Watchdog agencies


  • Ethics Committee & Ombudsman Function
  • Ethics Hotline


  • Reported Complaints
  • Disclosure Requirements


  • Reported Violations
  • Process Divergences