Infosys chief against FI nominee on company boards

In fact, there is no point in reserving seats on the board to any category, be it institutions or employees, he told the seminar organised by the Confederation of Indian Industry (CII).

"We must create performance standards for external directors too and it would be a good idea to give him a job brief upfront so that he too is prepared for the role he is supposed to play in a company," Narayana Murthy said.

Earlier, noted economist Omkar Goswami said having an FI nominee on a board would make it difficult for the person to think in two diametrically opposite ways. "As an investor he would be deciding on what is good for his company and as a director he has to help the company in whatever endeavours it is making. This makes it difficult as the FI nominee has to think wearing two hats," Goswami said.

Narayana Murthy said corporate governance was now no more a matter of debate as the need for global capital would make it imperative for Indian firms to improve disclosure levels and bring in transparency to meet global standards.

"We at Infosys went for generally accepted accounting practices (GAAP) four years ago not with an eye on a Nasdaq listing but because we felt it would increase the trust that people have in us," he said.

To start with companies must abide by all rules laid down by government so that there is an incentive among government to reduce these rules, he said. Ashok Leyland managing director R Seshasayee said Indian firms may not be able to attract investors by their sterling performance, so they should attempt to do so through better transparency.

"This should be our competitive advantage," he said and added that the goal of the company should be to maximise shareholders’ value, be it a promoter, a financial institution or an individual investor.”

Companies must conduct their affairs in a manner that would benefit, customers, investors, vendor partners, employees, government and society at large, he said.