State the reasons of devising an effective whistle blower mechanism and policy.

Whistle blower needs protection against retaliation/misbehaviour by superiors. The company should devise an effective whistle blower mechanism enabling stakeholders, including individual employees and their representative bodies, to freely communicate their concerns about illegal or unethical practices. An effective whistle blower policy shall protect "whistle blowers" from unfair termination and other unfair prejudicial employment practices. At the corporate level, companies can provide protection to whistle blowers by establishing a well documented "Whistle Blower Policy" and ensuring its effectiveness practically. Clause 49 of the Listing Agreement prescribes as a mandatory requirement that companies shall establish a mechanism for employees to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of the company's code of conduct or ethics policy. The OECD Guide describes that an effective 'whistle blower' mechanism may be established by management as an internal control mechanism, assessed by internal auditors.