The Research On The Protection System For Company Internal Whistleblowers

Increasing company embezzlements and frauds indicate that improvements are required by the current corporation governance. With enacting the Bill Sarbanes, the foreign legal systems have reached a new pinnacle of the research for internal whistle-blower protection system in corporation governance.The internal whistle-blower refers to a person who is/was a member of an organization and happen to know some unlawful, immoral or rule-breaking actions committed by the very organization or/and its members. The internal whistle-blower would disclose this information to some relevant institutions or persons, internal and external, who are likely to take steps.Regardless of the similarities between the internal whistle-blower and snitch in traditional meaning, there are essentially different from each other in subject scope and purpose. The internal whistle-blower plays an irreplaceable role in decreasing corporation frauds, preventing commercial bribes and enhancing the CSR of a company. However, the internal whistle-blower has to face constant retaliations from the law-breakers in reality. In order to encourage them to actively impeach and disclose the existing and/or potential unlawful actions within a company, the protection system for internal whistle-blower is required to ensure its effectiveness. Measures including keeping the anonymity of reporters, legal liability exemption and retaliation cognizance can be adopted. There is no denying that improper accusations of employees may cause damages to companies or even a third party. Therefore, the protect system shall be strictly applied to certain internal denounces. The whistle-blowers should base their accusations on rational reasons even proofs to prove unlawful actions and their possibilities. Moreover, a set of procedure should be made for internal whistle blow. It is essential that, without special circumstances, internal denounces for illegal actions should be pre-processed by internal procedures before the reporter disclose this information to external groups.The puzzledom of corporation governance in China encourage us to learn and introduce the protection system for internal whistle-blower. The system is also required by Chinese companies in global competitions. Judging from the Chinese legal system, it is feasible to construct a internal whistle-blower protection system with Chinese characteristics under the guideline of Company Law of the PRC...