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. We adopted a much stricter definition of independence as required by the NASDAQ listing rules and the Sarbanes-Oxley Act, U.S.
Lead Independent Director
Prof. Marti G. Subrahmanyam is the Lead Independent Director.
He represents and acts as spokesperson for the independent directors as a group, and is responsible for the following :
- Presiding over all executive sessions of the Board’s independent directors
- Working closely with the Chairman and the CEO to finalize the information flow, meeting agendas and schedules
- Liaising with the Chairman, CEO and the independent directors on the Board
- Taking the lead role, along with the Chairman, in the Board evaluation process
Board membership criteria
The nominations committee works with the entire Board to determine the appropriate characteristics, skills and experience required for the Board as a whole as well as its individual members. Board members are expected to possess the expertise, skills and experience required to manage and guide a high-growth, high-tech IT services company, deriving revenue primarily from G-7 countries. Expertise in strategy, technology, finance, quality and human resources is essential. Generally, the members are between 40 and 60 years of age, and are 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 us. Board members are expected to rigorously prepare for, attend and participate in all Board and applicable committee meetings. Each member is expected to ensure that their other current and planned future commitments do not materially interfere with their responsibilities with us.
Selection of new directors
The Board is responsible for the selection of new directors. The Board delegates the screening and selection process involved in selecting new directors to the nominations committee, which consists exclusively of independent directors. The nominations committee in turn makes recommendations to the Board on the induction of any new directors.
Membership term
The Board constantly evaluates the contribution of the members and periodically shares updates with the shareholders about re-appointments as per statute. The current law in India mandates the retirement of one third of the Board members (who are liable to retire by rotation) every year, and qualifies the retiring members for re-appointment. Executive directors are appointed by the shareholders for the tenure of a maximum period of five years, but are eligible for re-appointment upon completion of their term. Subject to the applicable provisions of law, non-executive directors generally serve for a period of nine years (three terms of three years each) or up to the age of retirement, whichever is earlier.
Retirement policy
The age of retirement for all executive directors is 60 years. The nominations committee may, at its discretion, determine their continuation as members of the Board upon superannuation / retirement.
The age of retirement for non-executive directors and independent directors is 65 years.
The age of retirement for independent directors joining the Board on or after October 15, 2010, shall be 70 years.
An independent Board chair is generally permitted to serve in the capacity until the age of 70 years.
Succession planning
The nominations committee works with the Board to plan for orderly succession of leadership within the Board and the company, and to maintain contingency plans for succession in case of any exigencies.
Board compensation policy
The compensation committee determines and recommends to the Board the compensation payable to the directors. All Board-level compensation is approved by the shareholders and separately disclosed in the financial statements. Remuneration of the executive directors consists of a fixed component and a performance incentive. The compensation committee makes a quarterly appraisal of the performance of the executive directors based on a detailed performance-related matrix. The annual compensation of the executive directors is approved by the compensation committee, within the parameters set by the shareholders at the shareholders’ meetings.
The compensation payable to the independent directors is limited to a fixed amount per year as determined and approved by the Board, the sum of which is within the limit of 1% of our net profits for the year, calculated as per the provisions of the Companies Act, 1956. The performance of independent directors is reviewed by the Board on an annual basis.
Cash compensation paid to directors in fiscal 2011
in 
crore
Name of the director |
Fixed salary |
Bonus / Incentives |
Commission |
Total |
Notice period (in months) |
|||
Basic salary |
Perquisites / Allowances |
Retiral benefits |
Total fixed salary |
|||||
Founder and non-executive director |
||||||||
N. R. Narayana Murthy |
– |
– |
– |
– |
– |
0.61 |
0.61 |
NA |
Founders and whole-time directors |
||||||||
S. Gopalakrishnan |
0.34 |
0.12 |
0.08 |
0.54 |
0.57 |
– |
1.11 |
6 |
S. D. Shibulal |
0.34 |
0.11 |
0.08 |
0.53 |
0.55 |
– |
1.08 |
6 |
K. Dinesh |
0.34 |
0.11 |
0.08 |
0.53 |
0.57 |
– |
1.10 |
6 |
Whole-time directors |
||||||||
T. V. Mohandas Pai |
0.43 |
0.14 |
0.10 |
0.67 |
2.42 |
– |
3.09 |
6 |
Srinath Batni |
0.43 |
0.14 |
0.10 |
0.67 |
1.62 |
– |
2.29 |
6 |
Independent directors |
||||||||
Deepak M. Satwalekar |
– |
– |
– |
– |
– |
0.59 |
0.59 |
NA |
Prof. Marti G. Subrahmanyam |
– |
– |
– |
– |
– |
0.79 |
0.79 |
NA |
Dr. Omkar Goswami |
– |
– |
– |
– |
– |
0.51 |
0.51 |
NA |
Rama Bijapurkar(1) |
– |
– |
– |
– |
– |
0.04 |
0.04 |
NA |
Claude Smadja(2) |
– |
– |
– |
– |
– |
0.23 |
0.23 |
NA |
Sridar A. Iyengar |
– |
– |
– |
– |
– |
0.69 |
0.69 |
NA |
David L. Boyles |
– |
– |
– |
– |
– |
0.65 |
0.65 |
NA |
Prof. Jeffrey S. Lehman |
– |
– |
– |
– |
– |
0.67 |
0.67 |
NA |
K. V. Kamath |
– |
– |
– |
– |
– |
0.56 |
0.56 |
NA |
R. Seshasayee(3) |
– |
– |
– |
– |
– |
0.10 |
0.10 |
NA |
| Notes : | None of the above directors are eligible for any severance pay and none of them hold any stock options as at March 31, 2011. |
| (1)For the period April 1, 2010 to April 13, 2010 | |
| (2)For the period April 1, 2010 to August 30, 2010 | |
| (3)For the period January 13, 2011 to March 31, 2011 |