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Shareholder
Board
Managemen
t
Employees
DEFINITION:-
Seperation of the roles of the CEO & the Chairman: The roles of the
CEO and the Chairman are different. The CEO takes care of the senior
management whereas the chairman takes care of the board.
Directors & Executives Remuneration: This is one of the mixed & vexed
issues of corporate governance that first came to the center stage. The key
issues would include
Transparency
Justifiability of the pay in the context of performance
The process adopted in determining it
Severance payments
Non-executive directors’ pensions
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Protection of Shareholders rights & their executives:
INTRODUCTION TO SATYAM
COMPUTER CONSULTANCY LIMITED
SATYAM COMPUTER CONSULTANCY LIMITED was established on
June 24 1987. the founder of such organization was mr.Ramalinga Raju.
Chief executive officer at the time of the scam was Mr. Ram Mynampati
And chief financial officer of such was mr. Valdamani Srinivas.Non executive
directors were Krishna Palepu & Vinod.K.Dham. satyam computer consultancy
limited has its headquarter at Hyderabad.
Application Software
Business process outsourcing
Business value enhancement
Consulting and Enterprise Solution
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Infrastructure Management Service
Integrated Engineering Solution
Product and Application Testing
Six Sigma Consulting
SCS had achieved several awards and achievements for its meritorious work.
To name a few:
1) UK trade and Investment India business award for “ CORPORATE
SOCIAL RESPONSIBILITY”
2) Ranked No.1 in American society for and development best
award 2007.
After the scam of rs.14000 crore came into light, the board of members were
Replaced temporarily by experts. Several board members retired voluntarily.
Even the auditing company, named KPMG was penalized. Several bidding
took place for acquiring satyam by several companies. The final three bidders
for satyam were L&T, Spice group and tech mahindra.
After the successful bidding, Tech mahindra acquired satyam and the
new chief executive officer is Mr. C.P. Gurnani. The two independent
directors are C.Achuthan and T.N.Manoharan. working directors included
Mr. C.P.Gurnani and MR.Vineet Nayyar.
After the deal was aborted, four of the prominent independent directors
resigned from the board of the company. In early January 2009, Raju
revealed that the revenue and profit figures of Satyam had been inflated for
past several years. The following were the inflated figures:
1) shareholders
2) employees
3) management
4) bankers
5) government
In the case of satyam, the above obligations were never fulfilled. The
acquiuisition of maytas infrastructure and properties were announced,
without the consent of shareholders. They were even provided with false
inflated financial reports. The shareholders were cheated.
The entire scam had its impact on management. Questions were raised
over the credibility of management.
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SHARE HOLDERS
BOARD
MANAGEM
ENT
EMPLOYEES
Ethical responsibilities:
•governing the organization by establishing broad policies and objectives;
•selecting, appointing, supporting and reviewing the performance of the
chief executive;
•ensuring the availability of adequate financial resources;
•approving annual budgets;
•accounting to the stakeholders for the organization's performance.
Actual scenario:
Despite the shareholders not being taken into confidence, the directors
went ahead with the management's decision.
Its financial statements for years were totally false, cooked up and...
Never had Rs 5064 crores (US$ 1.05 Billion) shown as cash for
several years.
So when the case came in light following are the actions that has been
taken:
• Nasscum sets up panel to avoid satyam like case in future- formed a
corporate Governance & ethics committee, chaired by N.R.Narayana
Murthy (chairman and chief mentor of Infosys.)
Andhra police
The Sebi had in December given a clean chit to Satyam in the probe on
violation of corporate governance law.
The government has realized the need of code of conduct & whistleblower
policy, now we will discuss what is these terms and how they played an
important role.
CODE OF CONDUCT:
This Code of Business Conduct covers a wide range of business practices and
procedures. It does not cover every issue that may arise, but it sets out basic
principles to guide all employees and officers of the Company. Those who violate
the standards in this Code will be subject to disciplinary action, including possible
dismissal. Furthermore, violations of this Code may also be violations of the law
and may result in civil or criminal penalties for you, your supervisors and/or the
Company. The basic principles discussed in this Code are subject to any
Company policies covering the same issues:
• Compliance with Laws, Rules and Regulations
• Conflicts of Interest
• Corporate Opportunities
• Political Contributions
• Confidentiality