Corporate Governance

WINNING EMPLOYEES GROWING INVESTORS

Presented by :Mahesh Parmar Poonam Ullal Divya Parmar Deepak Sharma

DELIGHTED CUSTOMERS

HAPPY SOCIETY

TRUSTED SUPPLIERS

SATISFIED GOVERNMENT AND REGULATORS

Corporate Governance

Satyam Vada Dharmam Chara

Forever speak the truth and follow the dharma - Taittariya Upanishad

Corporate Governance
What is Governance?
Corporate Governance is the application of best management practices, Compliance of law in true letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders. -The Institute of Company Secretaries of India

ICSI National Award for Excellence in Corporate Governance

Best Governed Companies

&

INTRODUCTION
Type : Public Company Industry : IT Services, IT Consulting Headquarters : Bengaluru, India

Area served : World Wide

Key People : N R Narayana Murthy(Chairman) & (Chief Mentor) , K. V. Kamath (Chairman) S. Gopalakrishnan (Co-Chairman), S.D Shibulal ( CEO & MD ) Services : IT, Business consulting and Outsourcing services Revenue : US $ 6.83 billion (Q3- 2012) Employees : 145088 (Q4, 2011) Divisions : Infosys BPO, Infosys China Website : www.infosys.com BSE : 2859.40 increase 12.80 (+ 0.45%)
Market Cap ( Rs CR) : 164192.21

Face value ( Rs): 5.00

P/E : 22.07 EPS : 129.58

Book Value ( Rs):

426.69

Achievements
Voted as the Best Managed Company in Asia.
Biggest exporters of Software. First to follow the US Generally Accepted Accounting Principles before going for Nasdaq listing in 1991. Championed Corporate Governance in India

Corporate Governance Ratings.

CRISIL : CRISIL assigned CRISIL GVC Level 1 rating to Infosys. This Governance and Value Creation (GVC) rating indicates capability to create wealth for all our stakeholders while adopting sound corporate governance practices. ICRA : ICRA assigned CGR 1 rating to corporate governance practices of Infosys. The rating of CGR 1 is the highest on ICRAs Corporate Governance Rating (CGR) scale of CGR 1 to CGR 6. Infosys is the first company to be assigned the highest CGR by ICRA. TNS Survey : Ranked 1 in the category of Good reputation index The financial transparency and disclosure standards of Infosys are the worlds best. It is awarded First position in SAFA ( South Asian Federation of Accountants.) Best Presented Accounts Award 2004 in the Communication and Information Technology Sector based on the evaluation of the Annual Report of the company. Best Annual report award from the Institute of Chartered Accountants of India for the 10th successive year. Infosys topped the regional rankings for best Corporate Governance in Asia Moneys Corporate Governance Poll. It has also received National award for Excellence in Corporate Governance from the Institute of Company Secretaries of India

THE INFOSYS MODEL

A formal code of business conduct and ethics. To be signed and adhered to by employees. Action against any employee for violation is taken seriously

Benefits of Good Corporate Governance

Having better access to external finance. Lower costs of capital. Improved company performance. Higher firm valuation and share performance. Reduced risk of corporate crises and scandals

INFOSYS A BENCHMARK FOR CORPORATE GOVERNANCE

Infosys had shown that increasing shareholder wealth and safeguarding the interests of other stakeholders was not incompatible. Every non- executive director not only played an active role in decision making, but also led or served on at least one of the three ( Nomination, Compensation, and Audit ) Infosys founders had set very high standards. The founders only took salaries and dividends and derived no other financial benefit from the company.

THE STRENGTHS' AND WEAKNESSES OF ICG

Nandan M Niletani Managing Director, chief operating officer and president of Infosys, said, The strengths are that we have been very successful in creating a value based system with a very strong focus on ethics . Strong division between personal & professional funds etc. Translated into brand equity , shareholder value etc. We will keep looking at global best practices what the world is saying on this front. We keep trying to improve to improve the way we manage to be on par with it.

OPERATIONS AND DISCLOSURE POLICIES

Operate through branches worldwide hence only one legal entity / financials
Subsidiaries created only for business and strategic reasons
Where the subsidiary requires a different strategy, culture, skill sets, cost structure, etc.

No material off-balance sheet items Highest disclosure standards

The mantra is In case of doubt, disclose. Go beyond the statute. Transparent reporting on all operating and financial metrics at the time of announcing results State of the art website with lots of useful information Easy access to management / frequent investor interactions at conferences, roadshows, etc.

Full compliance with laws in all countries / regimes that we operate in

ETHICS AND CORPORATE GOVERNANCE

Deals with determination what is right'," fair, prior and just" in decisions and actions made that affect stake holders.
It focuses on the business relationship with employees, customers, stockholders, creditors, suppliers and member of the society in which it operates. Corporate ethics , is a matter of leadership.

 Sexual Harassment at Infosys

CASE ALL ABOUT

This is a story of blackmail, sex, stalking, threats, oppression, hurt feelings and revenge. Interestingly, all this happened in and around the US offices of Infosys, one of India's most well-known and respected software companies, between October 1999 and December 2000. The events took place during October 1999 and December 2000 , when Former Secretary Reka Maximovitch alleged that Phaneesh had sexually harassed her and unlawfully terminated her. The events that took place during October 1999 and December 2000 became public knowledge in India only when Phaneesh Murthy (Phaneesh), the head of the sales and marketing, and communication and product services division of Infosys (and a director on the board), resigned from his post in June 2002 The case attracted a lot of media coverage Analysts claimed that the company had kept the issue under wraps for a long time.

Ethical steps taken by INFOSYS to overcome Harassment

Narayana Murthy the then Chairman of the Company said to the press that they have taken steps to strengthen out internal processes and balances to handle similar situations. Measures adopted by INFOSYS. Strengthened grievance redressed procedures. Initiated training programs. Broadened dissemination of information. Conducted course on sexual harassment and importance of gender sensitization. Project Housekeeping- Launched internal project to deal with unethical demeanor.

Suggested measures to tide over the crisis.

Notification of prohibition of sexual harassment at workplace. Penalize the offender. Ensure pleasant workplace environment to women. Redressal of time bound settlement of complaint. Establish strict policies and guidelines. Measure performance on the basis of corporate ethics. Initiating training programs regarding gender sensitivity.

Concluding remarks
By and large, Indian listed companies have been legally mandated to follow fairly strict standards of corporate governance and disclosure Comparisons will show that the standards are far stronger than all Asian countries, and in general stronger than most OECD countries Indian corporate sector regulators and companies have been quick to incorporate some of the best international corporate governance and disclosure practices The need of the day is more training of directors, audit committee members and senior executives of companies The challenge is to design and sustain a system that imbibes the spirit of corporate governance and not merely the letter of the law

BIBLOGRAPHY
http://askville.amazon.com/Reka-Maximovitch%27smotive-sexualharassment/AnswerViewer.do?requestId=35143257 http://www.midday.com/news/2003/may/53238.htm http://www.icmrindia.org/casestudies/catalogue/B usiness%20Ethics/BECG022.htm