Case Studies in Business Ethics and Corporate Governance

Corporate Governance in ITC LTD. 67

the factors set in Section C below, the audit committee can then determine whether the investiga-

tion of the report should be done by them or the management.

i. The General Counsel is reported by the Audit Committee in case the report is investi-

gated by the management by writing the conclusion of the report. Management should then

investigate that report promptly and give its results in writing to the Audit Committee.

In the investigation and analysis of the report, the management is free to seek help from

experts, Counsel or outside auditors.

ii. Similarly, the Audit Committee can also determine the kind of professional assistance it

needs, if any, for a fair investigation of the report. The Audit Committee is free to engage

a Counsel, Outside Auditor or other experts in seeking assistance in the analysis and

investigation of the report.

C. Considerations for who should investigate the report: Audit Committee or

the Management

The following are the factors to be considered while choosing between the Audit Committee and

the management regarding the investigation of a whistleblowing case.

1. Who is the wrongdoer: If the wrongdoer is an Executive Offi cer, a high-management offi cial

or a senior fi nancial offi cer, that factor may alone help in militating the case in favor of the

Audit Committee to conduct the investigation.

2. How serious is the wrongdoing: If the seriousness of the wrongdoing is high or if it involves

any crime, then it will be more appropriate that the investigation be undertaken by the Audit

Committee.

3. Credibility of the allegation of wrongdoing: It would be more appropriate that the wrongdoing

be investigated by the Audit Committee if the allegation is more credible or from a credible

source. All the facts associated with the allegation should be considered, and it should also not

be limited to earlier allegations, if any, that have been made by some analysts or the press.

D. Whistleblower protection

The Audit Committee should not retaliate in any way but adhere to the company’s policies. It

should also not tolerate any kind of retaliation by the management or any group or an individual,

indirectly or directly, against anyone who has made these allegations in good faith. The Audit

Committee should not, unless compelled by the legal or judicial process, reveal the identity of the

person, or persons, who has made the allegation and has asked for his identity to be kept confi -

dential. They should not make any attempt, or tolerate the attempts made by any group or person,

to ascertain the identity of the person who has complained of the wrongdoing.

E. Records

The Audit Committee should preserve all the records relating to any legal or accounting allega-

tion or report of a retaliatory act for a fair and proper investigation of any such report for a period

of seven years.

CONCLUSION

To conclude, one would say that the policies adopted by ITC regarding corporate governance and

corporate social responsibility are doing well. The company is adding “long-term shareholder value”

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