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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Effectiveness and Building Better Boards

Meera Engineering Ltd, a listed company, has set up a whistle-blower channel. An employee wants to report suspected misreporting by a senior executive and fears reprisal. Which feature must the vigil mechanism contain under section 177?

The vigil mechanism must provide adequate safeguards against victimisation and allow direct access to the Audit Committee chairperson in appropriate or exceptional cases. It covers directors and employees, and its details must be disclosed on the company website, if any, and in the Board's report.

  1. AAdequate safeguards against victimisation and, in appropriate or exceptional cases, direct access to the chairperson of the Audit CommitteeCorrect
  2. BReporting only to the managing director, to keep matters internal
  3. CA bar on directors using it, as it is meant only for employees
  4. DDisclosure of the mechanism only to the employees, and not on the website or in the Board's report

Explanation

Section 177(10) requires adequate safeguards against victimisation and provision for direct access to the Audit Committee chairperson in appropriate or exceptional cases. Section 177(9) covers both directors and employees. The details must also be disclosed on the website, if any, and in the Board's report.

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