Mumbai: The Securities and Exchange Board of India's committee on corporate governance has suggested "whistle-blower policy" where an official of a company who observes an unethical or improper practice can approach the audit committee of the company without necessarily informing his supervisors.

The committee, headed by the Infosys Chief Mentor, Mr N.R. Narayana Murthy, said the intention was to enable the management to establish a mechanism for employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the company's code of conduct.

The mechanism must have adequate provisions to ensure that there is no victimisation of employees who follow this procedure, the committee in its draft report released on Monday said.

It also suggested that companies should take measures to ensure that this right of access is communicated to all employees through means of internal circulars. The employment and other personnel policies of the company shall contain provisions protecting "whistle-blowers" from unfair termination and other unfair prejudicial employment practices, the report said.

The company has to annually affirm that it has not denied any personnel access to the audit committee of the company in respect to matters involving alleged misconduct and that it has provided protection to whistle-blowers from unfair termination and other unfair or prejudicial employment practices. Such affirmation has to be part of the board report on corporate governance that is required to be prepared and submitted together with the annual report.