Role of Vigilance in Management
Role of Vigilance in Management
Vigilance is the state of being watchful or alert for danger or some other kind of trouble. It consists of keeping a watchful eye on the activities of the organizational employees and taking prompt action to promote ethical practices and ensuring integrity and honesty in the official transactions.
There are individuals who are associated with unethical activities of getting personal gains at the cost of the organization. Such persons influence others leading to wastes, losses, and economic decline. Their acts damage the reputation of the organization. Hence to restrict such person’s mis-endeavours and promote organizational interests, vigilance is needed. Vigilance helps in improving the reputation of the organization, promoting custom of honesty and integrity, improving productivity, ascertaining accountability, increasing transparency and fairness, as well as disciplining the corrupted and protecting the honest ones. Vigilance is not a hostile outsider, it is an important part of the management. It assists in improved performance and higher customer satisfaction.
Vigilance like any other function of management, such as finance, personnel, operation, marketing, material, and contracts management etc. is an integral management function in the organization. For the organization, it is necessary to ensure that the organizational funds are properly used and that any sort of misuse / misappropriation is avoided. If the vigilance set up is effective in the organization, it ensures in the organization smooth, effective, and efficient functioning of all the organizational activities such as finance, personnel, operation, and marketing etc. Hence, vigilance occupies an important and rightful place in the management of the organization.
Vigilance is basically and admittedly a management function aimed at ensuring above board and orderly conduct of affairs by the employees of the organization. Hence, it is an integral part of the duties of a manager. The main objective of vigilance is to protect the honest and punish the corrupt. Righteousness is the foundation of good governance. The systems and procedures of the organization are not only to be efficient but also be ethical, just, and fair. Integrity has to be an essential ingredient of the system and procedure.
Vigilance is a tool of management. It is mainly a responsibility of the management. Organizations have both external threats and internal dangers. They protect themselves from external threats through creating security and posting manpower to guard against such threats. On the other hand, the role of vigilance is to protect the organization from internal dangers which are more serious than external threats.
In the Oxford dictionary, vigilance is defined as ‘watchfulness against danger or any action on the part of others alertness or closeness of observation’. Vigilance, in brief, implies ‘a state of remaining watchful or alert and is relevant everywhere, all the time’. Though the concept of organized or institutionalized vigilance is of recent origin, it has been in existence since time immemorial in some form or the other. In ancient times, rulers used to roam around in disguise, sometimes during night, to collect intelligence about ongoing activities in the kingdom so that effective steps could be taken to avert any untoward incident and maintain law and order, which is necessary for peace and prosperity.
Vigilance is defined as action or state of keeping careful watch for possible danger or difficulties. It is also defined as watchfulness, alertness, and caution. The word vigilance tells managers to be on vigil, to be vigilant, to be alert, and to have vigilance of the organizational image and reputation as well as to have vigilance of the organizational assets. There is need to integrate vigilance activity as a part of overall risk management strategy which in turn has to be integrated in the main stream operations of organization. The meaning of word ‘vigilance’ is ‘anti-corruption efforts’ particularly of preventive nature. The objectives of vigilance can be broadly classified as (i) integrity in governance, (ii) combating corruption, (iii) professionalism, (iv) transparency, (v) promptness, and (vi) impartiality as shown in Fig 1.
Fig 1 Classification of vigilance objectives
Vigilance is not a stand-alone activity. It has to be seen as part of the overall risk management strategy of the organization wherein the structures, systems, and processes are built in such a manner so as to prevent leakages which adversely affect productivity and profitability. A number of organizations are re-engineering their processes by leveraging information technology. It is in the organizational interest that when the organizations are reorganizing their business processes, they identify the likely risks like fraud, corruption, other malpractices and build in the needed risk management tools in the new processes.
Vigilance with a well-planned strategy to deal effectively with the cases of unfair practice, is an integral part of management. It is needed to detect the irregularities before it is carried out, analyze, and find out the reasons of such irregularities or to take effective measures to curb the same so that the irregularities are prevented and to take corrective action as per laid down procedure against the defaulter and award of punishment if the guilt is established. The effectiveness of vigilance to carry out these functions successfully and in a transparent and an impartial manner needs that it is to have capacity and capability to assess the adverse impact on finances, property, and image of the organization and capacity of taking appropriate action well in advance to avoid such threats and pilferages.
The vigilance in the organization is required to work as a system and not as a part of a system. Vigilance is to be capable of and be equipped with trained manpower and expertise to collect advance intelligence information, identify the sources of such threats and subversive designs. The organization is required to formulate its vigilance policy for achieving the goals which are to be simple, clear, and transparent. An alert and effective management with serious concern for clean organizational image and better judicious utilization of funds and resources takes suitable, effective and, result oriented actions to exercise necessary control so as to ensure the adoption of system and procedure for stopping the misuse of position, power, and funds.
The main aim of vigilance function in any organization is to assist the management to achieve its goal by ensuring that all transactions are carried out as per systems and procedures while minimizing the scope of malpractices / misconduct and misuse of funds, whereas the aim of any commercial / industrial organization is to achieve the planned production target with optimum utilization of resources to ensure profitability, productivity, and quality within laid down time and cost, being aware of its responsibility and accountability. Hence, the role of vigilance department is complimentary and not contradictory to the organizational objectives as frequently made out.
The purpose of vigilance activity is not to reduce but to improve the level of managerial efficiency and effectiveness in the organization. Commercial risk-taking forms part of the organizational functioning. Hence, every loss caused to the organization, either in monetary or non-monetary terms, need not necessarily become the subject matter of a vigilance inquiry. Thus, whether a person of common prudence, working within the ambit of the prescribed rules, regulations and instructions, has taken the decision in the prevailing circumstances in the commercial / operational interests of the organization is one possible criterion for determining the bonafides of the case. A positive response to this question can indicate the existence of bonafides. A negative reply, on the other hand, can indicate their absence.
It is quite unfair to use the benefit of hind-sight to question the technical merits of a managerial decision from the vigilance point of view. At the same time, it is unfair to ignore motivated or reckless decisions, which have caused damage to the interests of the organization. Hence, a distinction has to be made between a revenue loss which has arisen as a result of a bonafide commercial / operational decision, and an extraordinary loss which has occurred because of any malafide, motivated or reckless performance of duties. While the former has to be accepted as a normal part of the functioning and has to be ignored from the vigilance point of view, the latter has to be viewed adversely and dealt with under the existing disciplinary procedures.
Principles of vigilance – Vigilance is an integral part of the management. It provides important instruments for improving performance of the organization. This includes promoting clean commercial transactions, professionalism, productivity, promptness, and ethical practices. It also assists in systemic improvements in curbing opportunities for corruption. Hence, vigilance helps in improving efficiency and effectiveness of the employees as well as the organization. The cardinal principles of vigilance are (i) ethical standards, (ii) transparency, (iii) fairness, (iv) competitiveness, and (v) accountability as shown in Fig 2.
Fig 2 Cardinal principles of vigilance
Ethical standards are those standards which command virtues of honesty, compassion, and loyalty. Transparency means not hiding of any facts or matter from all those who are stakeholders and who take the decisions. Fairness means application of same principles to all concerned under similar conditions. Competitiveness means encouraging competition within the organization in the interest of the organization. Accountability means that if there is any deviation from the laid down rules / procedures in the interest of the organization which is to be clearly recorded upfront rather be used later as justification.
Vigilance angle – Vigilance angle is obvious from several acts of the employees. These acts are described below.
Employees demanding and / or accepting gratification other than legal remuneration in respect of an official act or for using their influence with any other person. Their obtaining valuable thing, without consideration or with inadequate consideration from a person with whom the employee has or is likely to have official dealings or employee’s subordinates have official dealings or where the employee exerts influence.
Employees obtaining for themselves or for any other person any valuable thing or monetary advantage by corrupt or illegal means or by abusing their position in the organization. Their possessing assets disproportionate to their known sources of income. There are cases of misappropriation, forgery, or cheating, or other similar criminal offences. Further, if there is undue / unjustified delay in the disposal of a case, perceived after considering all relevant factors, it reinforces a conclusion that there is the presence of vigilance angle in the case.
There are, however, other irregularities where circumstances have to be weighed carefully to take a view whether the employee’s integrity is in doubt. These are (i) gross or willful negligence, and recklessness in decision making, (ii) blatant violations of systems and procedures, (iii) exercise of discretion in excess, where no apparent interest is evident, (iv) failure to keep the controlling authority / superiors informed of needed transactions and issues in time, and (v) cause of undue loss or an associated gain to an individual or a set of individuals / a party or parties. These are some of the irregularities where the vigilance personnel are to carefully study the case and weigh the circumstances to come to a conclusion whether there is reasonable ground to doubt the integrity of the employee concerned.
Vigilance investigation on a complaint is normally not to be called for on the basis of a mere difference of opinion / perception or an error of judgment simplicities or lack of efficiency or failure to attain exemplary devotion in the performance of duties. Such failures can be a matter of serious concern to the organization but not from the vigilance point of view. They are to be dealt separately by the organizational management.
Absence of vigilance angle in different acts of omission does not mean that the concerned employees are not liable to face the consequences of their actions. All such lapses not attracting vigilance angle, indeed, are to be dealt with appropriately by the management as per the disciplinary procedure under the service rules.
Vigilance organization – Vigilance is an important function of the management, like other functions such as finance, personnel, and marketing etc. It is now considered part and parcel of the organization. Hence, vigilance cannot overlook the ultimate objectives of the organization and has to function within their framework. However, the main objective of vigilance is to eradicate corruption in the organization, it has to safeguard the interests of the organization and, hence, has to take a balanced view.
Vigilance organization is never to be instrumental in ‘framing’ a case against an employee. It is never to be a tool in the process of witch‐hunting at the behest of individuals, however highly placed they are. Vigilance efforts to tackle malpractices and corruption in the organization is to be mainly the vigilance objective.
Vigilance checks are to be objective based. Preventive checks are to be judiciously designed to give fair coverage to all sensitive departments with due weightage to such factors as (i) loss of revenue to the organization, and (ii) harassment of the employee / common man. Also, vigilance is to steer clear of quarrels / personal enmity between two individuals since attempts are frequently made to involve vigilance in such matters.
Vigilance is not to interfere in administrative matters. This is to be left to the organizational management itself. Complaints having vigilance angle only need be looked into by vigilance. There is to be no subversion of vigilance cases to favour an individual on account of local / political pressures or pulls. Vigilance is to give their recommendations to the disciplinary authority without any fear or favour.
Functions of vigilance – Vigilance is basically and admittedly a managerial function and assist the management in maintaining integrity, purity, and efficiency of the administration. While it is difficult to outline an exhaustive list of functions and responsibilities of vigilance personnel, since the sphere of vigilance is ever-evolving.
Vigilance is a key management tool which is to take the organization forward in higher growth trajectory. Its function is not to be viewed as impediment in achieving the objectives of the organization rather it is to be viewed as a facilitator in accomplishing organizational objectives. Its function is to emphasize more on sensitizing employees of the organization to bring awareness among the employees towards transparency in day-to-day activity keeping in mind the rules and regulations.
The vigilance functions to be performed by the organization are wide in scope and include collecting intelligence about corrupt practices committed, or likely to be committed by the employees of the organization, investigating or causing an investigation to be made into verifiable allegations reported, processing investigation reports for further consideration of the disciplinary authority concerned, taking steps to prevent improper practices / misconduct etc.
The functions of the vigilance include (i) conducting preventive check and carrying out checks, with follow-up investigations, on serious cases of irregularities, based on source information disciplining the wrong doers and protecting the honest performers, (ii) keeping a careful watch on the possible areas of activities which are against the interest of the organization in order to avoid difficulties and danger, (iii) undertaking prompt investigation of authenticated complaints involving malafide intent, (iv) ensuring speedy processing of vigilance cases at all stages and undertaking regular review of these cases, (v) holding vigilance seminar, training programmes, and lectures etc. to educate the employees to curb irregularities and corruption, (vi) increasing transparency and fairness, (vii) advising for suspension / transfer / administrative action against defaulted employees and administrative action against defaulted contractors who are engaged in the organization, (viii) ascertaining accountability, (ix) reducing wastages and leakages, (x) promoting ethical practices and culture of honesty and integrity, (vi) reforming systems and procedures and spreading the awareness of them for corruption free delivery and promoting healthy growth, (xi) codifying the rules, procedures, norms, and systems in key areas such as marketing, purchasing, stores, operations, finances, award of contracts and personnel managements in order to avoid adhocism and lack of transparency and accountability, (xii) improving the image of the organization by striving for zero tolerance for corruption, (xiii) undertaking review of existing rules and procedures to suggest the system improvement as per merit of case for reducing possibility of corruption / leakage of revenue, (xiv) surveillance and detection watch on the working of the employees of doubtful integrity, and (xv) arranging regular and surprise inspections at sensitive work units, which are susceptible to corruption.
By adopting the above functions of the vigilance, the organization management is to consider that (i) prevention is better than cure, (ii) executives as supervisors of employees are to works as vigilance personnel, and (iii) vigilance objectives are to help improve the working environment and working system.
Once alertness / awareness come in the organization, scope of malpractices gets eliminated automatically. However, a focused attention is needed in those areas of the organization where (i) the employees have high discretionary powers, (ii) there is scope for the queue, (iii) the rules and procedures are complex, (iv) the accountability is low (v) there is normally delay in decision making, (vi) there is existence of opportunities to negotiate exist, and (vii) there is doubt on the integrity of the individual employees. Vigilance set up of the organization is required to identify such areas of likely corruption and target their efforts for setting up clean governance systems through introduction of comprehensive checks and controls.
The functions of the vigilance activities can be broadly divided into five categories namely (i) preventive and pro-active vigilance, (ii) punitive vigilance, (iii) surveillance and detection, (iv) predictive vigilance, and (v) corrective vigilance as shown in Fig 3. The vigilance administration of the organization is required to follow these broad approaches. The first three are the conventional vigilance approaches. A recent approach to vigilance deviates from the three conventional vigilance approaches. This approach focuses on predictive vigilance, whereby the attempt is to preempt deviant behaviour, and corrective vigilance which consists of finding solutions to stop recurrence of irregularities.
Fig 3 Categories of the functions of vigilance activities
Pro-active vigilance is creating awareness and educating all the employees on anti-corruption measures, simplification of rules and procedures, and plugging of loop holes in the system. It consists of conducting vigilance awareness programmes for educating the employees to take clean, honest, effective, and transparent decisions.
Preventive vigilance plays an important role in strengthening the vigilance set up of the organization. It consists of setting up of procedures and systems to restrain the acts of wrong doing and misconduct in the different areas of the functioning of the organization. Preventive actions are to prevail over punitive actions which consist of taking appropriate deterrent action against the employees responsible for irregularities. Organization is required to enforce meaningful, workable, and objective systems and procedures to (i) develop trust and transparency in all transactions, (ii) prevent leakage of revenue, (iii) promote pride and self‐esteem of the organization, and (iv) promote time bound action in all spheres of activities.
While punitive action for the misconduct and other malpractices is certainly important, surveillance and preventive measures to be taken are equally important as these are likely to reduce the occurrence of vigilance cases.
The importance of the role of line managers as a vigilance personnel cannot be underplayed since they continue to be the sole guardians of the maintenance of integrity and honesty in the organization. Any amount of vigilance cannot be effective and successful unless all the employees of the organization involve themselves and assume the role of vigilance personnel.
Preventive vigilance function – Preventing vigilance is done by ensuring a sound work system which minimizes the scope for irregularities / malpractices. Preventing vigilance is carried out for reducing corruption in an effective manner through (i) detailed examination of the existing procedure and simplifying rules and procedures, (ii) locating sensitive spots and have focused attention, (iii) posting of the employees with clean image at sensitive spots and further to have a periodical rotation policy for the employees in these areas, (iv) focused attention is to be done on the employees of doubtful integrity and undesirable contact man, (v) curtailing or restricting discretions of the employees, (vi) improving transparency in the organization, (vii) improving fairness, competitiveness, and accountability amongst the employees through awareness, education, and training, (viii) ensuring that there is strict observance of the conduct rules in the organization, and (ix) restricting the administrative delays and ensuring quick decision making.
Preventive vigilance is mainly concerned with checking any undesirable or corrupt practice among employees. It relates to a positive and analytical approach by taking steps for checking any possible loss to the organization. It involves identification of the source of corruption and taking necessary preventive and constructive steps to plug existing loop-holes in the systems, procedures, and methods of working etc. Vigilance related action is not restricted to a few employees working in the vigilance set up. Rather, it needs involvement of all the employees of the organization for preventing all types of corruption, malpractice, and misconduct. This in turn needs all the employee to take needed care in their own spheres of duties / activities. This, in fact, forms the fundamental aspects of vigilance in the organization. The following are the broadly categorized preventive vigilance measures.
Simplification and standardization of rules – Simplification and standardization of rules and procedures results in elimination of discretion and arbitrariness, which in turn reduces corruption. Identifying areas involving exercise of discretion which are not governed by guidelines together with a complete review of existing rules and regulations that is required to be undertaken for introducing clarity and accountability. Similarly, simplification and standardization of forms / applications also reduces scope for corruption.
Leveraging technology – Technology as an enabler for fighting corruption has been effectively established. E-procurements, e-payments, use of websites for dissemination of information and creating awareness, use of CCTV (closed circuit television) in places of public dealing, use of GPS (global positioning system) enabled devices and RFIDs (radio frequency identifications), use of appropriate analytical tools, computer assisted audit techniques for detecting frauds are examples of how technology strengthens the system of preventive vigilance.
Automation – Use of IT (information technology) as an enabler for reducing corruption along with BPR (business process re-engineering) is recognized as an effective tool of preventive vigilance. Automation reduces interface / interaction between organizational employees and common public. It also removes monopoly in delivery of services and personal discretion, reducing the opportunities for discretion hence leading to reduction in corruption. Hence, the organizations strive for reducing interface of the employees with common public / customers by way of automation / on-line services. However, IT systems are not an end in themselves, they are the means to an end. Hence, it follows that there is a need to develop a system of alerts as also a response mechanism.
Business process re-engineering (BPR) – Business process re-engineering is very important as it helps the organizations to rethink how they do their work and, in the process, encourages a full-scale re-creation of processes in order to meet the objectives of the organization. Existing processes can be re-engineered to even prevent leakage of revenue.
Transparency – Transparency removes the information gap between the public and organizational employees which in turn reduces corruption. The website of the organization is required to contain rules and regulations, contact details of senior employees and all other information useful for common public / customers.
Accountability – There is no fear of punitive action because of lack of accountability. A system with clear accountability and assigned responsibility at each level is necessary not only for smooth functioning but for increased transparency, efficiency, and for ensuring effective punitive action in case of misconduct.
Control and supervision – Regular and routine inspections, surprise inspections, audit and reviews keep a check on abnormal and corrupt behaviour. A list of points and areas prone to corruption facilitate the purpose of organizing checks and streamlining procedures. A structured interaction between vigilance and internal audit enables better monitoring and also help identify potential problem areas.
Early detection of misconducts – Early detection of misconducts apart from bringing to light the damages to the system, enables recouping the loss wherever possible and facilitates control of further damage.
Time-bound and effective punitive action – Punitive (disciplinary or criminal) action within short period of occurrence of misconduct and finalization of such cases in a time-bound manner resulting in award of exemplary and adequate (commensurate with gravity of misconduct) punishment deters others from committing such misconduct. Delays and inefficiencies in such proceedings encourages and emboldens others to take risk of committing misconduct under the belief that nothing is going to happen to them.
Provision of necessary infrastructural facilities – Non provision of adequate infra-structural facilities such as accommodation, conveyance, and utilities etc. also induce corruption.
Conducive work environment – Conducive work environment for preventive vigilance can include drawing up a list of sensitive posts, rotation policy for sensitive posts, identification of persons of doubtful integrity and keeping them away from sensitive posts / public dealing. It is also necessary to create an environment which promotes ethical behaviour. Protection to whistle blowers is required to be ensured in order to bring to light cases of corruption.
Awareness among public – If public is made aware of their rights, and also of the rules and regulations, then they are able to resist unfair treatment and arbitrary behaviour by organizational employees. Public is to be encouraged to demand the services due to them and to raise their voice when their rights are denied or powers are misused by organizational employees. Organizations are to prominently display information relevant / useful to the common public on their office notice board / website.
Inculcating moral values and ethical behaviour – Inculcating moral values and ethical behaviour among employees, particularly the new and younger employees is an important tool of preventive vigilance. One of such tools for the creation of such awareness is the celebration of vigilance awareness week (VAW) every year. With celebration of VAW, the organization aims at the creation of awareness among public as well as among the employees the need for imbibing right values.
Training and awareness – Capacity building and sensitization at all levels and across all functional areas is important. Organizational employees are to be made aware of their duties and responsibilities, code of conduct, rules and regulations through regular training and awareness programmes. A list of ‘dos and don’ts’ for employees is a simple yet effective tool. Likewise, familiarization with SOPs (standard operating procedures) relating to different spheres of activities improves awareness and reduces procedural violations / inadvertent errors arising out of a lack of awareness. Knowledge sharing initiatives such as publishing / circulating information relating to areas where fraud / misconduct has been detected and sharing information on best practices are other effective awareness generation methods for more effective preventive vigilance. There are also needed an effort to create awareness among all stakeholders.
There are organizations, who have a strong and robust training system. In these organizations, a strong induction and mid-career training programmes on vigilance are to be conducted. Further, all the training programmes being conducted is required to have a component of vigilance training in the programme. Also, there is a need for institutionalization of a preventive vigilance module and exposure visits to bring in attitudinal change in the employees in the training programmes. In those organizations which do not have a training department, lack of training leads to the situation where the employees frequently make mistakes and enter in a vigilance case. These organizations can adopt to get conducted the training on vigilance through external training agencies or to send their employees to external training programmes.
Integrity pact – Integrity pact (IP) is an important tool of preventive vigilance which is aimed at preventing corruption and ensuring integrity in procurement. It addresses not only bribery, but also other corrupt practices such as collusion and bid rigging etc. Integrity pact is a written agreement between the organization and all the bidders agreeing to refrain themselves from bribery, and collusion etc. If the written agreement is violated, the pact describes the sanctions which are to be applied. These include (i) loss or denial of contract, (ii) forfeiture of the bid or performance bond, (iii) liability for damages, (iv) exclusion from bidding on future contracts (debarment), and (v) criminal or disciplinary action.
Integrity pact has a monitoring system which provides for independent oversight. Independent external monitors are nominated for the monitoring of implementation of integrity pact. Hence, integrity pact has three players namely (i) the principal or the organization, (ii) the vendor or contractor, and (iii) the independent external monitor (IEM).
Punitive vigilance – While study and development of suitable systems for checking any irregular activity is important, taking appropriate deterrent action against the employees responsible for negligence in duty, causing wrongful revenue loss to the organization is equally important. This is known as punitive vigilance. It is necessary for promoting a culture of honesty and for punishing of the black sheep.
Punitive vigilance includes investigation and collection of evidence and speedy departmental inquiries. It is taking of swift and deterrent action against the real culprits. It is aimed at deterring the occurrence of a lapse. It is also known as reactive vigilance. It consists of carrying out the investigations and assisting disciplinary authority in taking punitive action by initiating and following up disciplinary / prosecution proceedings against the employee having lack of integrity. For punitive or reactive vigilance the important issues are (i) the principles of natural justice are to be followed, (ii) it is dealing with the actual lapses only, and (iii) taking of disciplinary actions against the employee only after the charges are proved without any doubt.
Punitive vigilance is difficult in public sector organizations for several reasons. The rewards are low to start with, thereby limiting the possibility of downward revisions. Given this constraint, disciplinary actions which limit the chances of career progression are frequently the preferred punishment. However, this has the misfortune of demotivating employees beyond the point of their career when punitive vigilance action is undertaken.
Surveillance and detective vigilance – It is done to find out irregularities / malpractices through inspections / checks / reviews etc. It is carried out by (i) conducting surprise checks / inspections, for the detection of corrupt practices, malpractices, negligence, and misconduct, (ii) surveillance of public contact points, (iii) close watch on employees at sensitive posts of doubtful integrity, (iv) scrutiny of decisions taken by employees having discretionary powers, (v) introducing elaborate check and control system, (vi) taking prompt actions on the complaints and feedbacks, (vii) scrutinizing sensitive documents such as inspection reports, complaints, press reports, audit reports, and reports from information source etc., and (viii) cultivating the system of informers or other sources for the detection of irregularities in the organization.
Predictive vigilance – It enables foreseeing in activity prejudicial to the interests of the organization and suggesting in advance corrective measures to be taken by the management against acts of misconduct, corruption, and lapses.
Corrective vigilance – It includes analysis of results of detective vigilance and exploration of the reasons and contributory factors, finding solutions to stop recurrence of irregularities and activate alarm signals, updating the practices / procedures to keep pace with time.
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