Whistle-blowing policy was a long felt need
It is heartening to read a news item in the previous week of the Business Times that the Securities and Exchange Commission (SEC), the corporate watchdog, has finally decided to bring far-reaching amendments to the Act making it mandatory for the listed companies to have a whistle-blowing policy in the corporate sector. I have been clamouring singlehanded for more than a decade for the installation of this vital piece of legislation amendment in the print media (Business Times) and it is a matter for solace that the SEC has finally taken a formidable decision to introduce an amendment to the SEC Act.
I wholeheartedly congratulate the Business Times for the prominence given to my articles which has finally given rich dividends. It defies comprehension as to why the SEC has been so insouciant all these years allowing some of the corporate giants to swindle shareholders and public funds to the tune of millions, if not billions. During this period, a large scale of corporate scandals have come into light such as Pramuka Bank, Ceylinco Golden Key, Touchwood Investments, Entrust Investments by resorting to illegal and unethical business practices whilst their counterparts who resorted to these heinous crimes in the rest of the world have been languishing in prisons for the sins they have committed.
The remarkable features of this legislative amendment according to the media release of the SEC is that it compels the corporate companies to provide a whistle-blowing policy with a guided process for any employee to blow the whistle to the authorities and spill the beans for the larger interest of the investors, general public and the government. Another notable inclusion appears to be that the employees are assured of confidentially and anonymity of the whistle-blowing and to provide required safeguards and protection to the whistle-blower from victimization and retaliation by the employer.
The amendment will also ensure punitive measures for the false and idle complaints that are commonly taken place with some ulterior motives to damage the reputation and corporate image of the companies and its directors. Though belated, three cheers for the SEC for bringing this legislative amendment thus fulfilling a long felt need under the “Yahapalanaya Government”, which undoubtedly, thousands of shareholders would relish for the extraordinary protection provided. It would in turn have an appreciable impact on the stock market which demands a turbo boost. Once the amendment is brought to the Act, SEC has a herculean task to train the directors, audit committees and the employees of the corporate sector of this vital piece of legislation across the board.
Athula Ranasinghe
Colombo