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Break the Silence

As whistle-blowing has proven to be the most effective way to prevent fraud, companies especially those in India need to develop strong robust systems that would encourage employees to speak up

By Deepshikha Thakur

According to a 2012 KPMG Fraud Survey, 71 per cent of the respondents believe that fraud is an inevitable cost of doingbusiness here. India was ranked 94 out of 174 countries in the Transparency Index, which ranks companies on the perceptionof corruption. It is ranked 132 among 185 economies ranked for the ease of doing business, where a high ranking on the ease of doing business means the regulatory environment is more conducive to thestarting and operation of a local firm.

The 2011 National Business Ethics Survey revealed that though 45 per cent of employees observe misconduct every year, more than one in five (22 per cent) employees who report it fear retaliation.

In an event where employees are afraid to speak up, how does one create an ethical organisation?

“The foundation stones for building an ethical organisation are undoubtedly its people, especially its senior leaders that the entire organisation looks up to. These people shape of the culture of the company and ethics is a function of culture and the culture itself. At the end of the day, it is about the people - the type of people you attract and recruit, the type of people you promote and the ones who lead the businesses.”

Anand Mahindra, CMD, Mahindra & Mahindra

“It is all very well to say that anyone can lodge a complaint against anyone who engages in misconduct etc, however that is not practical. We need to have a law, a framework which defines the reporting mechanisms and ensures zero retaliation for people who speak up. And we need to start with the politics and bureaucracy before having it for the corporates. Norms must be set in the political and bureaucratic domains to begin with.”

Dr. Rajiv Kumar, Senior Fellow, Centre for Policy Research and Former Secretary General, FICCI

“To create a transparent, ethicalorganisation, where people canquestion when in doubt, you needto have robust systems in place andthe leadership needs to consciouslybuild that faith in organisationalbehaviour. Both culture and policiescomplement each other and one mayfail without the other.”

L. Gurunathan, Professor of HRM and IR, XLRI, Jamshedpur

“Organisations generally find it very difficult to discern if the whistleblower is reporting the truth; is he driven by an ulterior motive or making a genuine complaint? This in turn may lead to inaction. Therefore a person’s credibilityand how neutral they are in theiraffiliations in the organisation plays a critical role in defining the effectiveness of a person as a whistle-blower.”

Abhijeet Vadera, Assistant Professor,Indian School of Business

“Once you accept that we as humans do err then your ability to manage yourself in difficult circumstancesand to ward off temptation is much better.”

K. Ramkumar, ED (HR, Customer Service & Operations), ICICI Bank

“If companies don’t give ‘a secondchance’ to wrong-doers, they wouldprevent them from wrongful conducta second, possibly a third time.”

V. Raghunathan, Academic, Popular Author and Columnist

“Companies must also build the skill sets required to help people recognise what they are doing and ensure culture penetration in all aspects of the business.”

Ed Cohen is Executive Vice President, NelsonCohen Global Consulting. An expert in leadershipand change management, Ed was withSatyam Computers (now Mahindra Satyam) asSr. VP-, Talent Management and Learning

“Ethics is above the law. The notion that what is legally permissible is ethically correct is wrong.”

Sankar Ramamurthy, Executive Director, PwC

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