Infosys, HLL best in corporate governance

Mumbai: A study by fellow members of the Institute of Company Secretaries of India has found leading companies like Infosys, HDFC, Hindustan Lever, Wipro and ICICI scoring high in corporate governance. On the other hand, companies like Reliance Industries, Bajaj Auto, Mahindra and Mahindra, Grasim, Zee Telefilms, SBI and MTNL have been rated rather poorly.

The study, findings of which were carried in the latest issue of the National Stock Exchange newsletter, covered 21 out of the 50 companies used in the composition of CNX S&P Nifty index. The researchers interviewed over 100 experts from different segments like chartered accountants, cost accountants, company secretaries, bankers, equity analysts and management consultants who were asked to rate these companies on a scale of 5 to 1 with regard to eight parametres.

These parameters were:

• The companys efforts to maintain shareholder value.
• The managements compliance with the norms of good corporate governance.
• The companys efforts to promote employee development.
• If the price charged by the company is affordable.
• Whether the company recognises rights and fulfils obligations towards other stakeholders.
• Whether the company is sensitive to environment and doing enough to improve the quality of life of the society and satisfy public expectations of fairness and ethical conduct.

Infosys scored high on all the aspects and has been voted as the best in corporate governance. Reliance has done better in terms of shareholders perception, but not done much in other aspects. Companies like Zee Tele, MTNL, Mahindra and Mahindra, Bajaj Auto, SBI and Grasim have failed to find place among the top 10 companies in any of the eight parametres.

According to the study, there is enough evidence in Europe and the US that shows that good corporate governance invariably leads to good corporate performance and expects Indian companies to do the same. It says: Good corporate governance seeks to achieve a balance between business and ethics, which means the process of achieving the business goals has to be ethical and fair on all fronts.