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Infosys a model for disclosure: Nasdaq

Sangita Shah

Infosys Technologies is again in the limelight and that too at the global level.

The company's disclosure and corporate governance practices are now being taken up as a role model by companies in the US. Indeed, Nasdaq itself has selected two companies - Infosys Technologies and USA Networks - as the "best value reporters".

"Multinational companies have started studying Infosys as a role model for disclosure. The company gives details about everything related to it under the sun in seven international languages, making it most investor friendly," Ghanshyam Dass, director (South Asia), Nasdaq, said.

In its presentation on Infosys titled "This is not Fantasy", Nasdaq has pointed out that the company provides segmented information to not only the shareholders and other stakeholders but also customers, clients, suppliers, media and analysts. "Infosys has maintained transparency beyond regulatory reporting requirements," Nasdaq adds.

Infosys' annual report and the disclosure of information on the company's website have become benchmarks of transparency. "For Infosys, maintaining the highest standards of corporate governance is not a matter of form but of substance. It is an article of faith, a way of life, an integral part of the company's core values," the company has said.

As a part of Infosys' commitment to adhering to global best practices, this chapter also discloses the company's compliance with the Euroshareholders Corporate Governance Guidelines 2000 and the Blue Ribbon Committee recommendations, and Infosys' adherence to the UN Global Compact Programme.

Further, a note on Infosys' compliance with the corporate governance guidelines of six countries - in their national languages - is presented in the chapter entitled financial statements prepared in substantial compliance with accounting requirements of Australia, Canada, France, Germany, Japan and the UK, coupled with reports of compliance with their respective corporate governance standards.

Corporate governance guidelines and codes of best practices began in the early 1990s in the UK and the US in response to problems in the performance of leading companies and the perceived lack of effective board supervision that contributed to those problems.

The Cadbury Report of the UK, the General Motors Board of Directors Guidelines in the US and the Dey Report in Canada were influential sources for other guidelines and codes.

Over the past decade, several guidelines and codes have been issued by various countries. Compliance with these recommendations is generally not mandated by law, although the codes that are linked to stock exchanges sometimes have a mandatory content.

In India, the Confederation of the Indian Industry took the lead in framing a code of corporate governance in April 1998. Infosys fully complies with, and indeed goes beyond CII's recommendations. This was followed by the recommendations of the Kumar Mangalam Birla Committee on corporate governance appointed by the Securities and Exchange Board of India - the recommendations were accepted in December 1999, and now find place in Clause 49 of the Listing Agreement of every Indian stock exchange. Infosys' compliance with these requirements is listed in the course of this chapter.

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