CORPORATE GOVERNANCE

IN INFOSYS

INTRODUCTION
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.
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.

INFOSYS TECHNOLOGIES
Infosys Technologies Ltd. (NASDAQ: INFY) was started in 1981 by seven

people with US$ 250. Today, it is a global leader in the "next generation" of IT and consulting with revenues of over US$ 4 billion.
Infosys has a global footprint with sales offices in 29 countries and development

centers in India, US, China, Australia, UK, Canada, Japan and many other countries. Infosys has over 155,629 employees of 97 nationalities.
Infosys takes pride in building strategic long-term client relationships. 97.5% of

the revenues come from existing customers

Infosys gives back to the community through the Infosys Foundation that funds

learning and education.

Infosys deliver measurable business value in 3 ways: Transform Optimize Innovate

 Vision

We will be a globally respected corporation.

Mission

Strategic Partnerships for Building Tomorrows Enterprise.

Values Client Value: To surpass client expectations consistently Leadership by Example: To set standards in our business and transactions and be an exemplar for the industry and ourselves Integrity and Transparency: To be ethical, sincere and open in all our transactions Fairness: To be objective and transaction-oriented, and thereby earn trust and respect Excellence: To strive relentlessly, constantly improve ourselves, our teams, our services and products to become the best

AWARDS
Forbes has ranked Infosys 19 among the world's most innovative companies

Infosys has been identified as one of the top 25 performers in Caring for

Climate Initiative by UN Global Compact and UN Environment Program.

Infosys has been ranked No.1 among the best managed companies in Asia

Pacific in the annual Euro money Best Managed Companies in Asia survey, 2013.

Infosys was voted India's most admired company in The Wall Street Journal Asia 200 every year since 2000. Specialized Partner of the Year North America in both Financial Management and Human Capital Management categories.

At Oracle Open World 2012, Infosys won the Oracle Excellence Award for

SERVICES
More sharing services

Management consulting services

Business application services Business IT services

Engineering services
BPO services Cloud

Mobility
Sustainability

NARAYAN MURTHY
One of the founder member of Infosys
Liberalization Socialism

Simplicity
Charity Selfless

IMPORTANCE OF CG IN INFOSYS
Satisfy the spirit
Maximizing shareholder value Sound corporate governance

Adopting cg policies
Cg audit Transparency

Independent directors

COMPANYS PHILOSOPHY
Framework

Guidelines
Principles: i. Satisfy the spirit ii. Transparent iii. Communicate externally iv. Follow law Board of directors Follow best practices

CORPORATE GOVERNANCE POLICIES

BOARD COMPOSITION
Size and composition of the board

 Responsibilities of the chairman, CEO and the COO: Non-executive Chairman and Chief Mentor N. R. Narayana Murthy ; Chief Executive Officer (CEO) and Managing Director S. Gopalakrishnan; Chief Operating Officer (COO) and Director S. D. Shibulal.
Independent chairman of the board
Executive co-chairman of the board

 Board definition of independent directors

According to clause 49 of the listing agreement with Indian stock exchanges, an independent director means a person who is not an officer or employee of the company or its subsidiaries or any other individual having a material pecuniary relationship or transactions with the company which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Lead independent director

 Board membership criteria

Board members are expected to possess the expertise, skills

and experience Expertise in strategy, technology, finance, quality and human resources between 40 and 60 years of age Not related to any executive directors or independent directors. They are not expected to serve in any executive or independent position in any company that is in direct competition with Infosys.

 Selection of new directors Membership term Retirement policy Board compensation policy Non-executive directors remuneration

Memberships in other boards

BOARD MEETINGS
Scheduling and selection of agenda items for Board

meetings.
Availability of information to Board members. Regular updates are provided to the Board. Discussion with independent directors. Materially significant related party transactions.

BOARD COMMITTEES
AUDITCOMMITTEE
Audit committee comprises five independent directors : Deepak M. Satwalekar, Chairperson Prof. Marti G. Subrahmanyam Sridar A. Iyengar K. V. Kamath R. Seshasayee The primary objective of the committee is to monitor and provide effective

supervision of the Managements financial reporting process to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting.

COMPENSATION COMMITTEE
Compensation committee comprises of four independent directors:
K. V. Kamath, Chairperson

Prof. Jeffrey S. Lehman

David L. Boyles Dr. Omkar Goswami

The purpose of the committee of the Board of Directors (the Board) shall

be to discharge the Boards responsibilities related to compensation of the Companys executive directors and senior management.
The committee has the overall responsibility of approving and evaluating

the compensation plans, policies and programs for executive directors and senior management

NOMINATIONS COMMITTEE
Nominations committee comprises three independent directors : Prof. Jeffrey S. Lehman, Chairperson Deepak M. Satwalekar K. V. Kamath The purpose of the committee (the committee) of the Board of Directors

(the Board) is to oversee the Companys nomination process for the top level management and specifically to identify, screen and review individuals qualified to serve as executive directors, non-executive directors and independent directors consistent with criteria approved by the Board and to recommend, for approval by the Board, nominees for election at the annual meeting of shareholders.

The committee also makes recommendations to the Board on candidates for : Nomination for election or re-election by the shareholders; and Any Board vacancies that are to be filled by the Board.

RISK MANAGEMENT COMMITTEE

Risk management committee is comprised of four independent directors :
David L. Boyles, Chairperson

Sridar A. Iyengar
Dr. Omkar Goswami Prof. Jeffrey S. Lehman

The purpose of the committee of the Board of Directors (the Board) shall be to assist

the Board in fulfilling its corporate governance ideals in overseeing the responsibilities with regard to the identification, evaluation and mitigation of operational, strategic and external environment risks.
The committee has the overall responsibility of monitoring and approving the risk

policies and associated practices of the Company. The committee is also responsible for reviewing and approving risk disclosure statements in any public documents or disclosures

MANAGEMENT REVIEW AND RESPONSIBILITY

Risk management

Infosys has an integrated approach to managing risks inherent in various aspects of their business.
Managements discussion and analysis

A detailed report on the Managements discussion and analysis is provided in the Managements discussion and analysis section of the Annual Report.

SHAREHOLDERS
Communication to the shareholders
They send quarterly reports to each shareholder via email. The report contains select financial data extracted from the audited financial statements under Indian GAAP and unaudited financial statements under IFRS. Moreover, the quarterly / annual results and official news releases are generally published in The Economic Times, The Times of India, Business Standard, Business Line, Financial Express and Udayavani (a regional daily published from Bangalore). Quarterly and annual financial statements, along with segmental information, are also posted on the website. Earnings calls with analysts and investors are broadcast live on the website and their transcripts are published on the website soon thereafter. Any specific presentations made to analysts and others are also posted on the website. The proceedings of the Annual General Meeting are webcast live for shareholders across the world.

Investor grievances and share transfer

Infosys has a Board-level investor grievance committee to examine and redress shareholders and investors complaints. The status on complaints and share transfers is reported to the entire Board. The details of shares transferred and the nature of complaints are provided in the Shareholder information section of the Annual Report. For shares transferred in physical form, the Company provides adequate notice to the seller before registering the transfer of shares. The share transfer committee of the Company will meet as often as required to approve share transfers. For matters regarding shares transferred in physical form, share certificates, dividends and change of address, shareholders should communicate with Karvy Computershare Private Limited, their registrar and share transfer agent.

COMPLIANCE WITH THE CORPORATE GOVERNANCE CODES

Corporate Governance Voluntary Guidelines 2009 These guidelines have been published keeping in view the objective of encouraging the use of better practices through voluntary adoption, which also help them in achieving the highest standard of corporate governance.
The Ministry hopes that adoption of these guidelines will also translate into a much

higher level of stakeholders confidence which is crucial in ensuring the long-term sustainability and value generation by businesses.

The guidelines broadly focus on areas such as : Board of directors, Responsibilities of the board, Audit committee functions, Roles and responsibilities, Appointment of auditors, and A mechanism for whistleblower support.

Revised Clause 49 of the Listing Agreement

SEBI, with a view to improving corporate governance standards in

India and to enhance the transparency and integrity of the market, constituted a committee on corporate governance under the chairmanship of N. R. Narayana Murthy.
The committee issued two sets of recommendations : the mandatory

recommendations and the non-mandatory recommendations.

Areas where major changes were made include: independence of

directors, whistle blower policy, performance evolution of non executive directors, mandatory training of non-executive directors.
Failure to comply with clause 49 is punishable with imprisonment

of up to 10 years or fine up to RS.25 crore or both.

The Narayana Murthy committee Reort (2003)

All audit committee members should be financially literate and

at least one member should have accounting or related financial management expertise.
It is important for corporate boards to be fully aware of the risks

facing the business and that it is important for shareholders to know how companies manage their business risk.
The implementation through SEBIs regulatory framework will

strengthen existing governance practices and also provide a strong incentive to avoid corporate failures.

CONCLUSION
Infosys-a benchmark for corporate governance 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) committees.
The founders only took salaries and dividends and derived no

other financial benefits from the company.

Nandan m nilekani, 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, and strong division between personal and professional funds etc.

CORPORATE GOVERNANCE RATINGS

CRISIL CRISIL has been consistently assigning us the 'CRISIL GVC Level 1' rating over several years now.
This Governance and Value Creation (GVC) rating indicates our capability to create

wealth for all our stakeholders while adopting sound corporate governance practices. ICRA
ICRA assigned 'CGR 1' rating to our corporate governance practices. The rating is the

highest on ICRA's Corporate Governance Rating (CGR) scale of CGR 1 to CGR 6.

We are the first company in India to be assigned the highest CGR by ICRA. The

rating reflects our transparent shareholding pattern, sound Board practices, interactive decision-making process, high level of transparency.

Project By:

Rushabh Ajmera Ashita Dogra Anisha Gurbuxani Shweta Jain Ayesha Shaikh Neha Gurbuxani

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