Sebi clearance a relief for Infosys but questions linger: ET

Talking to ET Now, Shriram Subramanian, InGovern, says one needs to appreciate that Sebi won’t get into the spirit of corporate governance. It would stick to the regulations and compliances etc.

Preliminary poll has revealed that all requisite procedure and disclosures are in place. The stock market regulator Sebi is going with belief in their own research and investigation. This is a clear win for Infosys when it comes to corporate governance. Your reaction?

 Yes, I think it is a relief for the company but one needs to appreciate that the spirit of corporate governance is something that Sebi would not actually go into. It would rather stick to the regulations and compliances etc. From that perspective, Infosys would always have been in the clear but if you look at Infosys disclosures with respect to payments made to Rajiv Bansal it still merits some amount of transparency from Infosys as a company when it comes to the investing community. So yes it gets a clean chit from Sebi as far as the compliances and regulations related to corporate governance are concerned but questions still linger in the minds of the investors.

We all know Infosys has always looked at the highest benchmark when it comes to corporate governance. Clearly someone raised a finger at Infosys in that sense in February and now after three, four months, Sebi is clearly saying that the required has been done. When all these issues are raised, it is better that market regulator completes whatever investigations are needed and gets a clarity at the earliest. That is where even the markets or a particular shareholder would be satisfied?

Yes, I think overall if you look at the compensation paid to the CEO or to the COO or performance linked bonuses paid or severance package paid, for a company of Infosys size as long as it is benchmarked to peers and it is performance related those compensation issues are in line with global practices.

From that perspective, Sebi has given a clean chit to the company and obviously the whistleblowers complaint is immaterial. But a certain set of shareholders can always have issues with the company and in this case the set of shareholders can always have issues with the company and in this case the set of shareholders happened to be founders; that is all. It was sort of noise and it continues to noise because their alignment or their thinking is completely different from what the current board and the management functions and thinks. That may continue to fester for all we know.

We all know corporate governance has been an issue rocking the Indian corporates as a whole perhaps in the last six to eight months. It has also happened in Tatas, the oldest corporate house in the country. Sebi has itself voluntarily formed a Corporate Governance Committee to review the existing role of independent directors and to bring in more clarity. Do you see going forward we could expect more checks and balances being put in when it comes to corporate governance and that the role of independent directors and to bring in more clarity. Do you see going forward we could expect more checks and balances being put in when it comes to corporate governance and that the role of independent directors could be more defined?

Definitely. Corporate governance globally is an evolving topic. There is no one final goalpost. To that extent, the role of independent directors will also evolve and the Sebi committee and its limit covers much broader area and but will that be enough? Definitely no. As long as there are shareholders and there are people who wilfully defraud, corporate governance will continue to be a topic relevant to investors and to capital markets.

Source: ET – 12 June 2017