Corporate governance report

“Board of Directors is central to good corporate governance. Not only do directors help ensure regulatory compliance, but they shape corporate strategy and help chart its execution”.

– Troy A. Paredes,
Commissioner, U.S. Securities and Exchange Commission
At the Transatlantic Corporate Governance Dialogue, Brussels, Belgium,
October 25, 2010

Company’s philosophy

Corporate governance at Infosys is a value-based framework to manage our Company affairs in a fair and transparent manner. As a responsible corporation, we use this framework to maintain accountability in all our affairs, and employ democratic and open processes. We have evolved guidelines and best practices over the years to ensure timely and accurate disclosure of information regarding our financials, performance, leadership and governance of the Company.

Our corporate governance philosophy is based on the following principles :

• Satisfy the spirit of the law and not just the letter of the law. Corporate governance standards should go beyond the law.
• Be transparent and maintain a high degree of disclosure levels. When in doubt, disclose.
• Make a clear distinction between personal conveniences and corporate resources
• Communicate externally, in a truthful manner, about how the Company is run internally
• Comply with the laws in all the countries in which we operate
• Have a simple and transparent corporate structure driven solely by business needs
• The Management is the trustee of the shareholders’ capital and not the owner

The Board of Directors (‘the Board’) is at the core of our corporate governance practice and oversees how the Management serves and protects the long-term interests of all our stakeholders. We believe that an active, well-informed and independent Board is necessary to ensure the highest standards of corporate governance.

The majority of our Board, eight out of 14, are independent members. Further, we have audit, compensation, investor grievance, nominations and risk management committees, which comprise independent directors.

As part of our commitment to follow global best practices, we comply with the Euroshareholders Corporate Governance Guidelines, 2000, and the recommendations of the Conference Board Commission on Public Trusts and Private Enterprises in the U.S. We also adhere to the United Nations Global Compact policy. Further, a note on our compliance with the corporate governance guidelines of six countries (Australia, Canada, France, Germany, Japan and the United Kingdom) in their national languages is available on our website,www.infosys.com

Corporate governance ratings

CRISIL

CRISIL has been consistently assigning us the ‘CRISIL GVC Level 1’ rating for 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, disclosures encompassing all important aspects of our operations and our excellent track record in investor servicing. A notable feature of our corporate governance practices is the emphasis on transparency and substance over form.

Corporate governance guidelines

Over the years, the Board has developed corporate governance guidelines to help fulfill, our corporate responsibility towards our stakeholders. These guidelines ensure that the Board will have the necessary authority and processes in place to review and evaluate our operations when required. Further, these guidelines allow the Board to make decisions that are independent of the Management. The Board may change these guidelines from time to time to effectively achieve our stated objectives.

A. Board composition

Size and composition of the Board

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and to separate its functions of governance and management. Currently, the Board consists of 14 members, five of whom are executive or whole-time directors, one is non-executive and eight are independent directors.

Three of the executive directors are our founders. The Board believes that the current size is appropriate, based on our present circumstances. The Board periodically evaluates the need for change in its composition and size.

Composition of the Board, and directorships held as at March 31, 2011

Name of the director	Age	India listed companies(1)	All companies around the world(2)	Committee membership(3)	Chairperson of committees(3)
Founder and non-executive director
N. R. Narayana Murthy	64	–	6	–	–
Founders and whole-time directors
S. Gopalakrishnan	56	–	1	–	–
S. D. Shibulal	56	–	8	1	–
K. Dinesh	57	–	3	–	–
Whole-time directors
T. V. Mohandas Pai	52	–	5	–	–
Srinath Batni	56	–	4	–	–
Independent directors
Deepak M. Satwalekar	62	4	8	4	2
Prof. Marti G. Subrahmanyam	64	0	8	2	–
Dr. Omkar Goswami	54	6	12	8	4
Sridar A. Iyengar	63	3	13	6	3
David L. Boyles	62	–	2	–	–
Prof. Jeffrey S. Lehman	54	–	2	–	–
K. V. Kamath	63	3	5	1	–
R. Seshasayee	62	3	16	4	–

Notes :There are no inter-se relationships between our Board members.
	(1)	Excluding directorship in Infosys Technologies Limited and its subsidiaries.
	(2)	Directorships in companies around the world (listed, unlisted and private limited companies) including Infosys Technologies Limited and its subsidiaries.
	(3)	As required by Clause 49 of the Listing Agreement, the disclosure includes memberships / chairpersonship of audit committee and investor grievance committee in Indian public companies (listed and unlisted).

Responsibilities of the Chairman, CEO and the COO

Our current policy is to have a non-executive Chairman and Chief Mentor – N. R. Narayana Murthy; a Chief Executive Officer (CEO) and Managing Director – S. Gopalakrishnan; and a Chief Operating Officer (COO) and Director – S. D. Shibulal. The responsibility and authority of these officials are as follows :

• The Chairman and Chief Mentor is responsible for mentoring our core management team in transforming us into a world-class, next-generation organization that provides state-of-the-art, technology-leveraged business solutions to corporations across the world. He also interacts with global thought leaders to enhance our leadership position. In addition, he continues to interact with various institutions to highlight the benefits of IT and help these benefits percolate to all sections of the society. As Chairman of the Board, he is also responsible for all Board and corporate governance matters.
• The CEO and Managing Director is responsible for corporate strategy, brand equity, planning, external contacts and other management matters. He is also responsible for achieving the annual business targets and acquisitions.
• The COO is responsible for all customer service operations. He is also responsible for innovation and research in technology advancements, new initiatives and investments.
• The CEO, COO, the other executive directors and senior management personnel are responsible for achieving targets. They make periodic presentations to the Board on their responsibilities and performance.