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What is corporate governance?:

What is corporate governance? Corporate Governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate 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


Cont….. The primary purpose of corporate governance is to create wealth legally and ethically. This translates to bringing a high level of satisfaction to five constituencies -- customers, employees, investors, vendors and the society-at-large. The raison d'être of every corporate body is to ensure predictability, sustainability and profitability of revenues year after year. - N R Narayana Murthy

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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

Infosys Technologies: The Best among Indian Corporate:

Infosys Technologies: The Best among Indian Corporate As per the Credit Lyonnais Securities Analysis (CLSA), the corporate governance ratings of the Software firms are higher than those of other Indian firms. Infosys, based in Bangalore, is a publicly held, ISO 9001 certified company offering information technology consulting & software services. The software offered include application development, E-Commerce & Internet Consulting, Software Maintenance. Respected across the country, with very strong systems, high ethical values & a nurturing working atmosphere. Net income of US 1,155 million and revenue of US 4,176 million. At present having US 20.4 billion market capitalization


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

Narayana Murthy’s Global Strategy :

Narayana Murthy’s Global Strategy Global Delivery Model – Producing where it is most cost effective to produce & selling where it is most profitable to sell. Moving up the Value Chain – Getting involved in a software development project at the earliest stage of its life cycle. PSPD Model – Predictability of Revenues, Sustainability of Revenues, Profitability, Decision-making and risk taking

ICSI National Award for Excellence in Corporate Governance Best Governed Companies :

ICSI National Award for Excellence in Corporate Governance Best Governed Companies

Benefits of Good Corporate Governance :

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

Factor influence the corporate governance:

Factor influence the corporate governance 1. The ownership structure 2. The structure of company boards 3. The financial structure 4. The institutional environment problems of corporate governance Demand for information Monitoring costs Supply of accounting information

Problem of corporate governance:

Problem of corporate governance We lay structures over the corporate business, and fail to organize the business Corporate Performance Management reports against overlaid structures Accounting accounts for only part of the business cycle and against the wrong entities We govern the corporation by rules and regulations, because we cannot manage the actual business


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. .

Current status on corporate governance:

Current status on corporate governance Insistence on forms and structures Overarching regulations Regulatory overkill Lack of adequate number of strong, independent directors Large liabilities for companies and officers Has the pendulum swung too far? For the first time in the decade-long history of the Index of Economic Freedom, the U.S. is no longer among the top ten “most free” countries Wall Street Journal and the Heritage Foundation “Index of Economic Freedom”

Concluding remarks:

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

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