Write short notes on the following: (ii) Whistle blowing and Operational reporting system

Whistle blowing That an established vigil mechanism and its reporting methods finds a specific mention in the provisions of section 177(9) of the Companies Act, 2013 and that the LODR requires listed entities to devise effective whistle blower mechanism, reflects on how necessary the lawmakers think these systems are. It is so important that the Act expressly requires that whistle blowers be provided direct access to the Chairman of the Audit Committee and for adequate safeguards to avoid victimisation of the whistle blowers. The ineffective protection mechanisms for whistle blowers might result in creating an atmosphere of fear for whistle blowers. However, it still does not stop some crusaders from going ahead and blowing off the lid of corruption. The stronger the protection to the whistle blowers, more can be the chances of early fraud detections. Operational reporting system A reporting system that is operational and effective can be helpful in reducing fraud in companies. Employees should be aware of the reporting system if they need to report any kind of suspicious activity. A reporting system that keeps the person reporting the fraud anonymous might be more fruitful as it will keep the identity of the employee private while reporting his/her colleague. To make this system more beneficial, the employees should be encouraged and ensured that they won't land in trouble if they report anything that sparks doubt in their head.