What do you mean by 'Whistle Blower Mechanism'? Is it mandatory or voluntary for a listed company to establish ?

Whistle Blower Mechanism (Vigil Mechanism): A 'Whistle Blower Mechanism', also known as a Vigil Mechanism, is a formal system established within an organization to enable directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud, violation of company policies, or any other wrongdoing, without fear of victimization. It provides a channel for individuals to raise concerns confidentially and anonymously, ensuring that such issues are addressed appropriately and promptly by the management or the Audit Committee. The mechanism aims to: Provide adequate safeguards against victimization of employees and directors who avail of the mechanism. Ensure direct access to the Chairperson of the Audit Committee or the director nominated to play the role of the Audit Committee, in exceptional cases. Promote ethical conduct and good corporate governance practices. Mandatory or Voluntary for a Listed Company: For a listed company, establishing a Whistle Blower Mechanism (Vigil Mechanism) is mandatory . Relevant Provisions: Companies Act, 2013: Section 177(9) of the Companies Act, 2013, mandates certain classes of companies to establish a vigil mechanism. Companies (Meetings of Board and its Powers) Rules, 2014: Rule 7 of these rules specifies the companies required to establish a vigil mechanism. These include: Every listed company. Every company which accepts deposits from the public. Every company which has borrowed money from banks and public financial institutions in excess of fifty crore rupees. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: Regulation 22 of the SEBI LODR Regulations also mandates every listed entity to formulate a vigil mechanism for directors and employees to report genuine concerns. Once established, the existence of the mechanism must be appropriately communicated within the organization. The details of the establishment of the Vigil Mechanism are also required to be disclosed by the company on its website, if any, and in the Board's Report. Therefore, it is not merely a compliance requirement but a crucial aspect of robust corporate governance for listed companies to put in place an effective vigil mechanism that protects whistleblowers and ensures accountability.