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CORPORATE GOVERNANCE REPORT 2009-10Corporate Governance is about commitment to values andethical business conduct. It is a set of laws, regulations,processes and customs affecting the way a company isdirected, administrated, controlled or managed. This includesits corporate and other structures, culture, policies and themanner in which it deals with the various stakeholders.Corporate Governance is based on the principles of integrity,fairness, equity, transparency, accountability and commitmentto values. Good governance practices stem from the cultureand mindset of the organization. As stakeholders across theglobe evince keen interest in the practices and performance ofcompanies, Corporate Governance has emerged on the centrestage. Some of the important best practices of CorporateGovernance framework are timely and accurate disclosureof information regarding the nancial situation, performance,ownership and governance of the Company.Our Company is in compliance with the requirements of therevised guidelines on Corporate Governance stipulatedunder Clause 49 of the Listing Agreements with the StockExchanges.The Company believes that good Corporate Governance iscritical to enhance and retain investors’ trust. The Board ofDirectors exercises its duciary duties in the widest sense ofthe term. The Company always endeavors to enhance longterm shareholder value and respect minority rights in all itsbusiness decisions.Our disclosures always seek to attain the best practices inCorporate Governance. Our actions are governed by ourvalues and principles, which are reinforced at all levels withinthe Company. We are committed to doing things the right waywhich means taking business decisions and acting in a waythat is ethical and is in the compliance with the applicable legalrequirements. We acknowledge our individual and collectiveresponsibilities to manage our business activities with integrity.Philosophy on Code of GovernanceOur Corporate Governance philosophy is based on the followingprincipals:• Satisfy the spirit of the law and not just the letter of thelaw. Corporate Governance standards should go beyondthe law.• Be transparent and maintain a high degree of disclosurelevels. When in doubt, disclose it.• Make a clear distinction between personal convenienceand corporate resources.• Communicate externally, in a truthful manner, about howthe Company is run internally.• Have a simple and transparent corporate structure drivensolely by business needs.• Comply with the laws in all the countries in which weoperate.• Management is the trustee of the shareholders’ capital andnot the owner.Corporate Governance is an integral part of the philosophy of theCompany in its pursuit of excellence, growth and value creation.In addition to complying with the statutory requirements,effective governance systems and practices towards improvingtransparency, disclosures, internal control and promotion ofethics at work place have been institutionalized. The Companyrecognizes that good governance is a continuing exerciseand reiterates its commitment to pursue highest standardsof Corporate Governance in the overall interest of all itsstakeholders.Role of various entitiesBoard of Directors (“Board”) – The primary role of the Boardis that of trusteeship to protect and enhance shareholdersvalue through strategic supervision of the Company and itssubsidiaries. The Board plays a critical role in overseeing howthe management serves the short and long term interests ofshareholders and other stakeholders. This is reected in ourgovernance practices, under which we strive to maintain anactive, informed and independent Board. The Board is entrustedwith the ultimate responsibility of the management, generalaffairs, direction and performance of the Company and hasbeen vested with the requisite powers, authorities and duties.Board committees – The Board committees play a crucial rolein the governance structure of the Company and are being setout to deal with specic areas /activities which concern theCompany and need a closer review. The Board committeesare set up under the formal approval of the board, to carry outthe clearly dened role which is considered to be performed bymembers of the Board, as a part of good corporate governance.The Board supervises the execution of its responsibilities by thecommittee and is responsible for their action.Executive Directors- The Executive Directors contribute tothe strategic management of the Company’s businesses withinBoard approved directions and framework. As directors areaccountable to the Board for business/ corporate functions,they assume overall responsibility for strategic management,including governance processes and top managementeffectiveness.Independent Directors- Independent Directors play a criticalrole in imparting balance to the Board processes by bringingindependent judgements on issues of strategy, performance,resources, standards of the Company, conduct etc.In accordance with Clause 49 of the Listing Agreement withthe Stock Exchanges in India, the report containing the detailsof governance systems and processes at HCL TechnologiesLimited is as under:Board Size and CompositionThe Board of Directors is at the core of our Corporate Governancepractices and oversees how the management serves andprotects the long term interests of all our stakeholders. Webelieve that an active, well informed and independent Boardis necessary to ensure highest standards of CorporateGovernance.The Board of Directors (“Board”) of the Company has an optimumcombination of Executive and Independent Non-ExecutiveDirectors who have an in-depth knowledge of business,in addition to the expertise in their areas of specialization.The Board provides leadership, strategic guidance and an33