Hemwati Nandan Bahuguna Garhwal University (A Central University) SCHOOL OF COMMERCE PRESENTED BY RITU BHARTI 20500118 M.Com 4 th sem CO-ODINATOR : PROF. R.C DANGWAL SIR
1. Hemwati Nandan Bahuguna Garhwal University (A Central
University) SCHOOL OF COMMERCE PRESENTED BY RITU BHARTI 20500118
M.Com 4th sem CO-ODINATOR : PROF. R.C DANGWAL SIR
2. 1. Introduction 2. Review Of Literature 3. Pillars Of
Corporate Governance 4. Objective Of Study 5. Committee Involved 6.
Mandatory Authorities 7. Clause 49 8. Mandatory Disclosure 9. Non
Mandatory Compliance 10. Data Collection 11. Infosys 12.
Limitations 13. Suggestions 14. Conclusion
3. Corporate governance is the set of processes, customs,
policies, laws, and institutions affecting the way a corporation
(or company) is directed, administered or controlled .Corporate
governance also includes the relationships among the many
stakeholders involved and the goals for which the corporation is
governed.
4. Meaning Corporate governance is concerned with holding the
balance between economic and social goals and between individual
and communal goals. Definition Corporate governance is the set of
processes, customs, policies, laws and institution affecting the
way a corporation is directed, administered or controlled.
5. Accountability Fundamental Pillars of Corporate Governance
Corporate Governance Transparency Responsibility Fairness Source:
Malaysian Institute of Corporate Governance
6. Accountability Clarifying governance roles &
responsibilities, and supporting voluntary efforts to ensure the
alignment of managerial and shareholder interests and monitoring by
the board of directors capable of objectivity and sound judgment.
Transparency Requiring timely disclosure of adequate information
concerning corporate financial performance.
7. Responsibility Ensuring that corporations comply with
relevant laws and regulations that reflect the societys values.
Fairness Ensuring the protection of shareholders rights and the
enforceability of contracts with service/resource providers.
8. Economic Regulation Authority, Perth, Australia;Open
University, Ho Chi Minh City, Vietnam. Evidence from previous
empirical studies from academic literature has sought to confirm
the effect of corporate governance on a firms performance. A
literature review from relevant academic studies has indicated the
following characteristics applied to corporate governance such as:
(i) board size; (ii) presence of female board members; (iii)
duality of the CEO; (iv) education level of board members; (v)
board working experience; (vi) independent directors; (vii) board
compensation; (viii) board ownership; and (ix) block holders.
American Law Institute (ALI) . ALI has proposed an independent
board of directors whose function is to moniter as opposed to
manage. Under the ALI proposals ,the board would focus on auditing
functions ,reviewing management ,operations ,staffing ,and
execution ,to assess the competency of the CEO and seniors staff of
an organisation.
9. Corporate governance is holding the balance between economic
and social goals and between individual and communal goals. The
governance framework is there to encourage the efficient use of
resources and equally to require accountability for the stewardship
of those resources. The aim is to align as nearly as possible the
interests of individuals, corporations and society. The incentive
to corporations is to achieve their corporate aims and to attract
investment. The incentive for states is to strengthen their
economics and discourage fraud and mismanagement. - Sir Adrian
Cadbury, Corporate Governance: A Framework for Implementation
10. 1. To discuss the concept of CORPORATE GOVERNANCE. 2. To
know about its authorities and history . 3. To know about the
benefits and limitations of CORPORATE GOVERNANCE. 4. To know about
its key constituents. 5. To know about CORPORATE GOVERNANCE
mechanism. 6. To study CORPORATE GOVERNANCE in INFOSYS.
11. Securities Exchange Board of India, known as SEBI mandates
Corporate Governance in listing agreement. 13
12. 14 Listed Companies. Why only listed companies? Why not
other companies?
13. SCAMS in Secondary market Pre Y2K scams: 1. Harshad Mehta
scam year 1992 2. NBFC Companies Scam- year 1995-1998 3. CRB
Finance and Mutual Funds Scam of Year 1995-1997 4. Plantations
Company scam- year 1997-1999 5. Vanishing Companys Scam year
1995-1999 6. Name Changing Scam year 1999-2000 7. Dot Com. Company
Scam year 1999 2000 8. US-64 Disaster Gadbud of year 1997-1998 9.
Ketan parekh Scam year 1999 2001 10. UTI Fiasco Gadbad year 1994
2000 15
14. After effects of such scams: Loss to the exchequer. Loss of
faith by Stake holders. Loss of faith by Share holders. Thus in
order to mitigate further losses, SEBI came up with Corporate
Governance also called Clause 49. Effects of CG: Transparency in
working of the company. Loss to exchequers were minimized. Faith of
Stake holders and share holders restored. 16
15. First Corporate Governance was drafted by Confederation of
Indian Industry (CII) in the year 1998. It was a voluntary code,
since it was not recognized by any statutory authority.
Subsequently the Statutory Authorities felt that under Indian
conditions a statutory rather than a voluntary code would be more
purposeful, and meaningful. First Committee on Corporate Governance
was set: Kumara mangalam Birla Committee - 1999 17
16. 18 ROLE OF THE COMMITTEE to suggest suitable amendments to
the listing agreement executed by the stock exchanges with the
companies and any other measures to improve the standards of
corporate governance in the listed companies, in areas such as
continuous disclosure of material information, both financial and
non-financial, manner and frequency of such disclosures,
responsibilities of independent and outside directors; to draft a
code of corporate best practices; and to suggest safeguards to be
instituted within the companies to deal with insider information
and insider trading
17. enhancement of shareholder value, keeping in view the
interests of other stakeholder Stakeholders: includes suppliers,
customers, creditors, the bankers, the employees of the company,
the government and the society at large. 19
18. 20 Purpose: Review of Corporate Governance Code. Reason:
Improve Corporate Governance standards in India. Perspective: (a)
to evaluate the adequacy of the existing practices. (b) to further
improve the existing practices.
19. 21 Listing Agreement as on date has 55 Clauses. Clause 49
deals with Corporate Governance. Corporate Governance Mandatory
Disclosures Non Mandatory Disclosures
20. 22 I. Board of Directors II. Audit Committee III.
Subsidiary Companies IV. Disclosures V. CEO/CFO Certification VI.
Report of Corporate Governance VII. Compliance
21. Criteria to be an Independent Director No pecuniary
material relationship with Company, Promoters, Directors, Senior
Management, Holding, subsidiary or associate Company. Is not a
relative of any of the Directors. Is/was not an employee of the
company or was partner of audit firm or legal firm which has
pecuniary interest in the past 3 years. Is not a substantial
shareholder, i.e. not more than 2% shareholding. Is not less than
21 years old. 23
22. Board Meeting Frequency: Four times a year. Maximum gap of
Four Months only. No. of Directorships/Chairmanships: Member of not
more than 10 Committees and cannot be Chairman of more than 5
committees. Code of Conduct: Board shall draft a Code of Conduct
and shall be applicable to all Board Members and Senior Management.
It shall be posted on the Website of the Company. Information to be
made available to the Board As per Annexure I A given . 24
23. A Sub Committee of the Board. Members should be Financially
Literate. Chairman of Audit Committee to be Independent. Company
Secretary to be the Secretary to the Committee. Audit Committee
Meeting Frequency: Four times a year, with maximum gap of Four
Months . 25
24. Overview Financials Statements Quarterly and Annual. Review
performance of the company Appoint & re-appoint Statutory and
Internal Auditors Approval of appointment of CFO 26
25. Material Non-Listed Indian Subsidiary Atleast one
independent director of Holding company to be in subsidiary
company. Audit Committee of Holding company to review financials of
Subsidiary company. Minutes of Subsidiary to be placed before Board
of Holding Listed company. 27
26. A. Basis of Related Party Transactions. B. Disclosure of
Accounting Treatment. C. Board Disclosure Risk Management. D.
Proceeds from Public, Rights, Preferential Issues. E. Remuneration
of Directors. F. Management. G. Shareholder. 28
27. CEO- Managing Director and CFO Director/Head Finance shall
submit a certificate to the Board on following: Reviewed financials
statement and it contains no untrue or misleading statements.
Financial Statements present true and fair view. They accept
responsibility for establishing and maintaining Internal control
for financial report and rectifying deficiencies, if any. 29
28. Annual Report should contain a separate section on
Corporate Governance with detailed compliance report. Format as per
Annexure I-C given . Quarterly Compliance certificate should be
submitted to Stock Exchange. Format as per Annexure I-B given .
30
29. A Certificate from either the Auditor or a Practicing
Company Secretary on compliance of conditions of corporate
Governance should form part of Directors Report. 31
30. There are certain Non- mandatory provisions in this clause,
which can be implemented at the discretion of the Company. Details
of which are available in Annexure I D as given . 32
31. Secondary data. Study of this topic is based upon secondary
data collection of the regarding topic of the presentation. Sources
: 1. Books 2. Research papers 3. Websites 4. wikipedia
32. Infosys Technologies is a leading Information Technology
(IT) company which provides end- to-end business solutions that
leverage technology. Infosys serves the client globally and as one
of the pioneers in strategic offshore outsourcing of software
services, it has leveraged the global trend of offshore
outsourcing.
33. Infosys was founded on 2 July 1981 by seven entrepreneurs,
N. R Narayana Murthy , Nandan Nilekani ,Krishna Gopalakrishanan,
S.D. Shibhulal K Dinesh and with N.S Raghvan . The company was
incorporated as "Infosys Consultants Pvt Ltd." in Model Colony,
Pune as the registered office.
34. He was one of the six founders who started Infosys with a
small investment of Rs. 10,000 and nurtured the organization to a
world-class company currently valued at Rs. 50,000 crores ($10.75
billion). His biggest legacy will be the dreams and confidence his
companys success has fostered in a whole generation of middle-class
India.
35. N R Narayan Murthy Chairman & Chief Mentor. S D
Shibulal- Director & COO. Srinath Batni- Director. S
Gopalakrishnan- Managing Director & CEO. K Dinesh-
Director.
36. Dr. Vishal Sikka takes over as the CEO and MD from S.D.
Shibulal. Revenue crosses 50,000 crore in rupee terms. Board
decides to increase the dividend pay-out ratio to up to 40% of
post-tax profits. Cash and cash equivalents (including
Available-for-sale financial assets and certificates of deposit)
cross 5 billion in dollar terms.
38. Aerospace & Defense Automotive Banking and Capital
Markets High Technology Insurance Resources Energy Healthcare
39. Physical Sciences. Mathematical Sciences. Life Sciences.
Social Sciences and Economics. Engineering Sciences.
40. New productions and key techniques- Successful launches
need to drive early consumer adoption and managing repeat demand is
contingent on coordinated and to meet shopper needs. Barriers to
successful products Products must be in at target levels by the
time consumer and trade promotions are executed.
41. Internal Governance Internal Control of Organisation
External Governance Monitoring Systems of International Agencies,
National Regulatory Agencies, Professional Institutes, Industry
Associations & NGO Result Appropriate Accountability &
Responsibility to Stakeholders
42. Corporate governance is about maximizing shareholder value
legally, ethically and on a sustainable basis. At Infosys, the goal
of corporate governance is to ensure fairness for every stakeholder
our customers, investors, vendor-partners, the community, and the
governments of the countries in which we operate. We believe that
sound corporate governance is critical in enhancing and retaining
investor trust. It is a reflection of our culture, our policies,
our relationship with stakeholders and our commitment to values.
Accordingly, we always seek to ensure that our performance is
driven by integrity. Our Board exercises its fiduciary
responsibilities in the widest sense of the term. Our disclosures
seek to attain the best practices in international corporate
governance. We also endeavor to enhance long-term shareholder value
and respect minority rights in all our business decisions.
43. Investment Information and Credit Rating Agency ( ICRA) and
the Credit Rating Information Services of India Limited (CRISIL)
and have been awarded a rating of Corporate Governance Rating 1
(CGR 1) and Governance and Value Creation Level 1 (GVC Level 1)
rating respectively.
44. 2015 Infosys has been honored with the first place in Best
CFO, Best corporate governance and Most committed to paying good
dividends categories at Asia's Best Companies 2015 awards for
India, organized by FinanceAsia. Infosys also received the second
and the third places in Best investor relations and Best CEO
categories, respectively. 2014 Infosys has won the 2014 Asia IP
Elite Award. Infosys has won the 2014 Thomson Reuters India
Innovation Award in the Hi-Tech Corporate category. Etc.
45. I. Primary data is not used. II. Lack of appropriate
sources and knowledge for research methodology. III. Practically
not evaluated due to lack of primary data.
46. 1. Corporate governance should be done globally on
international basis. 2. Corporate governance implications should be
done for international markets also. 3. For progressive growth of
firms in india firms should voluntarily opt for good corporate
governance. 4. Need for recruitment and selection of good manager
in domestic corporations who possesses all good qualities and
knowledge regarding corporate governance skills .
47. Corporate governance is concerned with holding the balance
between economic and social goals and between individual and
communal goals. The governance framework is there to encourage the
efficient use of resources and equally to require accountability
for the stewardship of those resources. The aim is to align as
nearly as possible the interests of individuals, corporations and
society. (Sir Adrian Cadbury, UK, Commission Report: Corporate
Governance 1992)