|The AC should review the policy and arrangements by which staff of the company and any other persons may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The AC's objective should be to ensure that arrangements are in place for such concerns to be raised and independently investigated, and for appropriate follow-up action to be taken. The existence of a whistle-blowing policy should be disclosed in the company's Annual Report, and procedures for raising such concerns should be publicly disclosed as appropriate.|
This Guideline sets out the policies and arrangements for raising concerns about improprieties in the company.
Misconduct by employees (including fraud) can happen at any time in any company. Such misconduct is often observed by other employees or external parties. If these employees or external parties make a report, this is referred to as whistleblowing.
Whistleblowing is one of the most effective methods of detecting corporate irregularities and fraud. It is widely accepted as a fundamental corporate governance mechanism that provides stakeholders with a way of raising serious issues to senior management and the Board.
However, for whistleblowing to be effective, there must be a formalised policy and secure mechanisms to encourage and protect whistleblowers, and follow through on the whistleblowing reports.
This Guideline requires the AC to review and ensure that whistleblowing or equivalent arrangements are in place, and that the existence of such a policy should be disclosed in the annual report, and the procedures for whistleblowing are publicly disclosed (such as in the company’s website and other platforms).
The disclosure of the policy and mechanisms will make it clear that the company takes malpractices and the protection of whistleblowers seriously, and that there is an official avenue to raise and address such concerns.
B. SGX Disclosure Guide
C. Related Rules and Regulations
D. CG Guides
- AC Guide 3.3: Fraud Risk Management [Risk Management and Internal Controls].
- AC Guide 3.4: Whistleblowing [Risk Management and Internal Controls].
E. Related Articles
- “Whistleblowers: The directors' ally” by Michael Gray. (65KB)
- “Fighting corporate fraud on the frontline” by Chris Leahy. (75KB)