Infosys chief visits J&K Bank, values corporate governance

Our Banking Bureau
21 April 2003

Murthy, who was the chairman on the committee for corporate governance appointed by the Securities and Exchange Board of India, delivered his address on corporate governance. He said: "Corporate governance is aimed at maximising sustainable value for stakeholders in a transparent manner and aligning interests of stakeholders and the society by adopting the ethical code of conduct and practices. Corporate governance sets high standards of disclosure, transparency — giving opportunity to the investors to correctly evaluate the financial status, business practices and prospects of an organisation or an enterprise.

"Corporate governance has three players — shareholders, who invest their capital in the company; management, who manage the affairs of the company; and the board of directors who are responsible to the shareholders. To ensure better corporate governance the composition of the board of directors should be such as to have adequate independent directors on the board who, apart from receiving the director''s remuneration, do not have any other material, pecuniary relationship or transactions with the company, its promoters, its management or its subsidiaries which in the judgement of the board may affect independence of the judgement of the directors.

"Corporate governance should prevent insider-trading and also ensure the protection of the interest of investors from exploitation by persons, who are in possession of or have access to price sensitive information, which may affect the value of shares of the company. Through good governance alone, a company shall progress, flourish and benefit the shareholders, its stakeholders which includes employees, its customers and finally the society as a whole."

Earlier, Murthy, M Y Khan, chairman, J&K Bank, said: "Murthy is one of India''s most renowned and respectable personality and businessman par excellence. Considering the contribution Murthy has made to the country''s IT industry we can call him the Messiah of New India. Murthy has a history behind and a vision ahead. Today''s gigantic structure of Infosys has emerged through the various phases of development from a humble beginning founded by Murthy."

Beig stressed on the need to emulate corporate governance in government functioning for achieving the objectives of the overall transformation and development of the society. He said he is of the view that for achieving the objectives, sustained growth and development of the society, corporate governance should replace bureaucratic governance. Before concluding his thought-provoking address, Beig appealed Murthy to lend his name to J&K by making investment in the state, which has been languishing for development, and could also come on the map of modern society.

J&K Bank was incorporated in 1938 by the then government as its promoter to bolster the economy of the state. Today the bank has emerged as one of the leading commercial banks in India with its branch network spread across the length and breadth of the country.