SECOND LAYER: GOVERNANCE BY THE BOARD OF DIRECTORS
All our directors inform the Board every year about the Board membership and Board Committee membership they occupy in other companies including Chairmanships in Board/Committees of such companies. They notify us of any change as and when they take place in these disclosures at the board meeting.
As on March 31, 2012, we had nine non-executive Directors, three executive Directors of which one executive Director is also Chairman of our Board. All the nine non-executive directors are independent directors i.e. independent of management and free from any business or other relationship that could materially influence their judgment. All the independent directors satisfy the criteria of independence as defined under listing agreement with Indian Stock Exchanges and New York Stock Exchange Corporate Governance standards. The profile of our Directors is given below as of March 31, 2012.
Azim H. Premji has served as our Chief Executive Officer, Chairman and Managing Director (Designated as Chairman) since September 1968. More recently, Mr Azim Premji, Chairman, Wipro Limited has been honoured with the Padma Vibhushan award by Government of India for his contribution in trade and industry. Azim Premji is a graduate in Electrical Engineering from Stanford University, USA.
Dr. Ashok Ganguly has served as a director on our Board since 1999. He is the Chairman of our Board Governance & Nomination Committee and Compensation Committee. He is currently the Chairman of ABP Pvt. Ltd (Ananda Bazar Patrika Group). Dr. Ganguly also currently serves as a non-executive director of Mahindra & Mahindra Limited and Dr Reddy Laboratories Limited. Dr Ganguly is on the advisory board of Diageo India Private Limited. Dr. Ganguly is the chairman of Research and Development Committee of Mahindra and Mahindra Ltd, Member of Nomination, Governance & Compensation Committee and Chairman of Science, Technology & Operations Committee of Dr Reddy’s Laboratories Ltd. He is a member of the Prime Minister’s Council on Trade and Industry and the India-USA CEO Council, established by the Prime Minister of India and the President of the USA. Dr. Ganguly is a Rajya Sabha Member. He is a former member of the Board of British Airways Plc (1996-2005) and Unilever Plc/NV (1990-97) and Dr. Ganguly was formerly the Chairman of Hindustan Unilever Limited (1980-90). Dr. Ganguly was on the Central Board of Directors of the Reserve Bank of India (2000-2009). In 2006, Dr. Ganguly was awarded the CBE (Hon) by the United Kingdom. In 2008, Dr. Ganguly received the Economic Times Lifetime Achievement Award. Dr. Ganguly received the Padma Bhushan award by the Government of India in January 1987 and the Padma Vibhushan award in January 2009.
B.C. Prabhakar has served as a director on our Board since February 1997. He has been a practicing lawyer since April 1970. Mr. Prabhakar holds a B.A. in Political Science and Sociology and a BL. from Mysore University, India. Mr. Prabhakar serves as a non-executive director of Automotive Axles Limited and 3M India Limited. He is also a member of the Audit, Risk and Compliance Committee and Chairman of the Administrative and Shareholder Investor Grievances Committee of Wipro Limited.
Dr. Jagdish N. Sheth has served as a director on our Board since January 1999. Dr. Sheth has been a professor at Emory University since July 1991. Previously, Dr. Sheth served on the faculty of Columbia University, Massachusetts Institute of Technology, the University of Illinois, and the University of Southern California. Dr. Sheth also serves on the board of Manipal Acunova Ltd. Dr.Sheth holds a B.Com (Honors) from Madras University, a M.B.A. and a Ph.D in Behavioral Sciences from the University of Pittsburgh.
Dr. Sheth is also the Chairman of Academy of Indian Marketing Professionals.
Narayanan Vaghul has served as a director on our Board since June 1997. He is the Chairman of our Audit, Risk and Compliance Committee, a member of the Board Governance & Nomination Committee and a member of the Compensation Committee. He was the Chairman of the Board of ICICI Bank Limited from September 1985 to April 2009. Mr. Vaghul is also on the Boards of Mahindra and Mahindra Ltd., Mahindra World City Developers Limited, Piramal Healthcare Limited, and Apollo Hospitals Enterprise Limited. Mr. Vaghul is on the boards of Hemogenomics Pvt. Ltd., Universal Trustees Pvt.Ltd., and IKP Trusteeship Services Limited. Mr. Vaghul is the Chairman of the Compensation Committee of Mahindra and Mahindra Limited and Piramal Healthcare Limited. Mr. Vaghul is also a member of the Audit Committee in Nicholas Piramal India Limited. Mr. Vaghul is a member of the Remuneration Committee of Mahindra World City Developers Limited and Apollo Hospitals Enterprise Limited. Mr. Vaghul is also the lead independent director of our Company. Mr. Vaghul holds Bachelor (Honors) degree in Commerce from Madras University. Mr. Vaghul was the recipient of the Padma Bhushan award by the Government of India in 2010. Mr. Vaghul also received the Economic Times Lifetime Achievement Award.
Priya Mohan Sinha became a director of our Company on January 1, 2002. He is a member of our Audit, Risk and Compliance Committee, Board Governance & Nomination Committee and Compensation Committee. He has served as the Chairman of PepsiCo India Holdings Limited and President of Pepsi Foods Limited since July 1992. From October 1981 to November 1992, he was on the Executive Board of Directors of Hindustan Lever Limited (currently Hindustan Unilever Limited). From 1981 to 1985, he also served as Sales Director of Hindustan Lever Limited (currently Hindustan Unilever Limited). Currently, he is also on the board of Lafarge India Private Limited. He is also a member of Audit and Board and Governance Committee Lafarge India Private Limited. He was also the Chairman of Reckitt Coleman India Limited and Chairman of Stephan Chemicals India Limited. Mr. Sinha is also on the Advisory Board of Rieter India. Mr. Sinha holds a Bachelor of Arts from Patna University, and he has also attended the Advanced Management Program at the Sloan School of Management, Massachusetts Institute of Technology.
William Arthur Owens has served as a director on our Board since July 1, 2006. He is also a member of the Board Governance and Nomination Committee. He has held a number of senior leadership positions at large multinational corporations. From April 2004 to November 2005, Mr. Owens served as Chief Executive Officer and Vice Chairman of the Board of Directors of Nortel Networks Corporation, a networking communications company. From August 1998 to April 2004, Mr. Owens served as Chairman of the Board of Directors and Chief Executive Officer of Teledesic LLC, a satellite communications company. From June 1996 to August 1998, Mr. Owens served as President, Chief Operating Officer and Vice Chairman of the Board of Directors of Science Applications International Corporation (SAIC), a research and engineering firm. Presently, Mr. Owens serves as a member of the Board of Directors of Polycom Inc., Intelius, Flow Mobile, Prometheus, and Chairman of Century Link Inc., a communications company. Mr. Owens holds an M.B.A. (Honors) degree from George Washington University, a B.S. in Mathematics from the U.S. Naval Academy and a B.A. and M.A. in Politics, Philosophy and Economics from Oxford University.
Shyam Saran became a director of our Company on July 1, 2010. He has been a director of Indian Oil Corporation Limited since March 2012. He is a career diplomat who has served in significant positions in the Indian government for over three decades. He joined Indian Foreign Service in 1970. He last served as the Special Envoy of the Prime Minister of India (October 2006 to March 2010) specializing in nuclear issues, and he also was the Indian envoy on climate change. Prior to this he was the Foreign Secretary of the Government of India from 2004 to 2006. He also served as the Ambassador of India to Nepal, Indonesia, Myanmar and Mauritius. His diplomatic stints have taken him to Indian missions in Geneva, Beijing and Tokyo. He has been a Fellow of the United Nations Disarmament Program in Geneva, Vienna and New York, U.S.A. Mr. Saran holds a Post Graduate degree in Economics. Mr. Saran has been honored with the Padma Bhushan award by the Government of India for his contribution in civil services.
Dr. Henning Kagermann became a director of the Company on October 27, 2009. He served as Chief Executive officer of SAP AG until 2009. He has been a member of the SAP Executive Board since 1991. He is also President of Acatech (German Academy of Science and Technology) and currently a member of supervisory boards of Deutsche Bank AG, Munich Re, Deutsche Post, BMW Group in Germany and Nokia. Dr. Kagermann is a professor of Theoretical Physics at the Technical University Braunschweig, Germany and received an honorary doctorate from the University of Magdeburg, Germany.
M K Sharma became a director of the Company on July 1, 2011. He is a member of our Audit, Risk and Compliance Committee. He served as Vice Chairman of Hindustan Unilever Limited from 2000 to 2007. He served as a whole-time director of Hindustan Unilever Limited from 1995 to 2000. He is currently on the boards of ICICI Lombard General Insurance Co. Limited, Fulford India Limited (Indian affiliate of MSD), Thomas Cook (India) Limited, Birla Corporation Limited, KEC International Limited and The Andhra Pradesh Paper Mills Limited. Mr. Sharma is a member of the Audit Committee of Fulford (India) Limited and Thomas Cook (India) Limited. Mr. Sharma is the Chairman of Remuneration Committee of Fulford (India) Limited. Mr. Sharma is a member the Shareholder’s Grievance Committee of Thomas Cook (India) Limited. Mr. Sharma is the Chairman of the Board Governance and Nomination Committee, Compensation Committee of ICICI Lombard General Insurance Co. Limited.
Suresh C Senapaty has served as our Chief Financial Officer and Executive Director since April 2008 and served with us in other positions since April 1980. He is a member of the Administrative/Shareholders & Investor Grievance Committee. Mr. Senapaty holds a B. Com. from Utkal University in India, and is a Fellow Member of the Institute of Chartered Accountants of India. Mr. Senapaty is on the Boards of the following Indian Subsidiary/Associate companies: Wipro Trademarks Holding Limited, Wipro Chandrika Limited, Wipro Travel Services Limited, Cygnus Negri Investments Private Limited, Wipro Technology Services Limited, Wipro Consumer Care Limited and Wipro GE Healthcare Private Limited. Mr. Senapaty is also the Chairman of the Audit Committee of Wipro Technology Services Limited.
T K Kurien has served as our Chief Executive Officer-IT Business and Executive Director, Wipro Limited since February 2011 and served with us in other positions since February 2000. Mr. Kurien is a Chartered Accountant. Mr. Kurien is also a member of the Board of Wipro GE Healthcare Private Limited.
Information flow to the Board Members
Information is provided to the Board members on a continous basis for their information, review, inputs and approval from time to time. More specifically, we present our annual Strategic Plan and Operating Plans of our businesses to the Board for their review, inputs and approval. Likewise, our quarterly financial statements and annual financial statements are first presented to the Audit committee and subsequently to the Board of Directors for their approval. In addition specific cases of acquisitions, important managerial decisions, material positive/negative developments and statutory matters are presented to the Board and Committees of the Board for their approval.
As a system in most cases information to directors is submitted along with the agenda papers well in advance of the Board meeting. Inputs and feedback of Board members are taken in preparation of agenda and documents for the Board meeting.
We schedule meetings of our business heads and functional heads with the Directors prior to the Board meeting dates. These meetings facilitate Directors to provide their inputs and suggestions on various strategic and operational matters directly to the business and functional heads. Meeting with directors enthuse and motivate our business leaders.
We decide on the board meeting dates in consultation with Board Governance & Compensation Committee and all our directors, considering the practices of earlier years. Once approved by the Board Governance & Nomination Committee, the schedule of the Board meeting and Board Committee meetings is communicated in advance to the Directors to enable them to schedule their meetings.
Our Board met four times in the financial year 2011-12, on April 25-27 2011, July 19-20 2011, October 30-31, 2011 and January 18-20,2012.
Our Board meetings are normally scheduled for two days. The gap between two meetings did not exceed four months.
The necessary quorum was present for all the meetings.
Post-meeting follow-up system
After the board meetings, we have a formal system of follow up, review and reporting on actions taken by the management on the decisions of the Board and sub-committees of the Board.
Disclosure of materially significant related party transactions
During the year 2011-12, no transactions of material nature had been entered into by the Company with the Management or their relatives that may have a potential conflict with interest of the Company. None of the Non-Executive Directors have any pecuniary material relationship or transactions with the Company for the year ended March 31, 2012, and have given undertakings to that effect as per clause 49 of the Listing Agreement.
Details of transactions of a material nature with any of the related parties (including transactions where Directors may have a pecuniary interest) as specified in Accounting Standard 18 of the Companies (Accounting Standards) Rules, 2006, have been reported in the Notes to the Accounts and they are not in conflict with the interest of the Company at large.
Register under Section 301 of the Companies Act, 1956 is maintained and particulars of transactions are entered in the Register, wherever applicable.
Such transactions are provided to the Board, and the interested Directors neither participate in the discussion, nor do they vote on such matters, wherever approval of Board is sought.
Details of non-compliance by the company, penalties, and strictures imposed on the company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years.
The Company has complied with the requirements of the Stock Exchange or SEBI on matters related to Capital Markets, as applicable.
Whistle Blower policy and affirmation that no personnel have been denied access to the Audit, Risk and Compliance Committee
The Company has adopted an Ombuds process which is a channel for receiving and redressing of employees’ complaints. The details are provided in the section titled compliance with non-mandatory requirements of this report. No personnel of the Company were denied access to the Audit/Risk and Compliance Committee.
Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause.
Your Company has complied with all the mandatory requirements of the Clause 49 of the Listing Agreement. The details of these compliances have been given in the relevant sections of this Report. This Annual Report includes the disclosures recommended under National Voluntary Guidelines for the Social, Environmental and Economic Responsibilities of Business, 2011 issued by the Ministry of Corporate Affairs, Government of India. Please refer page 94 to 116 of this Annual Report for further details.
Lead Independent Director
The Board of Directors of the Company has designated Mr. N Vaghul as the Lead Independent Director. The role of the Lead Independent Director is described in the Corporate Governance guidelines of your company.
Particulars of directors proposed for re-appointment.
Dr. Jagdish N. Sheth, Dr. Henning Kagermann and Mr. Shyam Saran, retire by rotation and being eligible offer themselves for re-appointment at this Annual General Meeting. The Board Governance and Nomination Committee/Board have recommended their re-appointment for consideration of the Shareholders.
Brief resume of the Directors proposed for re-appointment at the ensuing Annual General Meeting is provided as an Annexure to the Notice convening the Annual General Meeting.
Remuneration Policy and criteria of making payments Directors
Compensation Committee recommends the remuneration, including the commission based on the net profits of the Company for the Chairman and Managing Director and other Executive Directors. This is then approved by the Board and shareholders. Prior approval of shareholders is obtained in case of remuneration to non executive directors.
The remuneration paid to Chairman and Managing Director and other Executive Directors is determined keeping in view the industry benchmark, the relative performance of the Company to the industry performance, and macro economic review on remuneration packages of CEOs of other organizations. Perquisites and retirement benefits are paid according to the Company policy as applicable to all employees.
Independent Non-Executive Directors are appointed for their professional expertise in their individual capacity as independent professionals / Business Executives. Independent Non Executive Directors receive sitting fees for attending the meeting of the Board and Board Committees and commission as approved by the Board and shareholders. This remuneration approved by the Board subject to the condition that cumulatively it shall not exceed 1% of the net profits of the Company for all Independent Non Executive Directors in aggregate for one financial year subject to an individual limit for each of the Non-Executive Directors.
The remuneration by way of commission paid to the Independent Non-Executive directors is determined periodically & reviewed based on the industry benchmarks.
Details of Remuneration to all Directors
Table 07 provides the remuneration paid to the Directors for the services rendered during the financial year 2011-12. No stock options were granted to any of the Independent Non Executive Directors during the year 2011-12.
Table 07: Directors remuneration paid and grant of stock options during the financial year 2011-12
|Azim H. Premji||N. Vaghul||B. C. Prabh-
|Dr. Jagdish N. Sheth||Dr. Ashok S. Ganguly||P. M. Sinha||Bill Owens||Suresh C. Senapaty||T.K. Kurien||Shyam Saran||M. K. Sharma||Henning Kager-
options granted during the year
|Upto 6 Months||Upto 6 Months||Upto 6 Months|
* Figures mentioned in $ - as amounts payable in $
@ Figures in Rs. equivalent to amount paid in foreign currency
# Appointed as Director with effect from July 1, 2011
All figures other than specifically stated above are in Indian Rupees
Table 08: Key Information pertaining to directors as on March 31, 2012
|Azim H. Premji||N. Vaghul||B. C. Prabhakar||Dr .Jagdish N. Sheth||Dr. Ashok S. Ganguly||P. M. Sinha||Bill Owens||Suresh C. Senapaty||T.K. Kurien||Shyam Saran||Henning Kagermann||M. K. Sharma|
|Category||Promoter Director||Independent Non-Executive Director||Independent Non-Executive Director||Independent Non-Executive Director||Independent Non-Executive Director||Independent Non-Executive Director||Independent Non-Executive Director||Executive Director||Executive Director||Independent Non-Executive Director||Independent Non-Executive Director||Independent Non-Executive Director|
|Date of appointment||01.09.1968||09.06.1997||20.02.1997||01.01.1999||01.01.1999||01.01.2002||01.07.2006||18.04.2008||01.02.2011||01.07.2010||27.10.2009||01.07.2011|
|Directorship in other companies *||16||7||2||2||4||1||-||6||1||1||-||8|
|Chairmanship in Committees of Board of other companies *||-||3||-||-||4||-||-||-||-||-||-||2|
|Membership in Committees of Board of other companies *||-||2||3||1||1||2||-||1||-||-||-||6|
|No. of Board meetings attended||4||4||4||4||4||3||4||4||4||4||4||3|
|Attendance at the last AGM held on July 19, 2011||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Number of shares held as on March 31, 2012@||95,419,432||-||5,000||-||1,666||33,333||-||91,083||25,012||-||-||-|
|Director Identification number||00234280||00002014||00040052||00332717||00010812||00035257||00422976||00018711||03009368||03116287||02449128||00327684|
*This does not include position in foreign companies, position as an advisory board member and position in companies under Section 25 of the Companies Act, but includes private companies.
*None of the Directors of our Company were members in more than 10 committees nor acted as chairman of more than five committees across all companies in which they were Directors. The Committee membership and committee Chairmanship shown above includes Audit Committee, Compensation Committee, Board Governance/Nomination Committee and Shareholders and Investor Grievance Committee.
@ Includes shares held jointly with immediate family members..