The Hindu Business Line : Directors’ expertise defines a company

They are different!
Satyam Computers prefers strong academic backgrounds.
Infosys admires advisorial or consultancy expertise.
Cognizant ropes in operational experience.
Wipro’s and TCS’ boards are eclectic.

K. Bharat Kumar
Moumita Bakshi Chatterjee

Chennai/New Delhi Feb. 5

The composition of the board of directors in a company says a lot about what the company wants. In the case of the Top Five IT services companies, some patterns stand out, even as each of them brings some value or the other to the table.

Satyam Computers, for instance, seems to prefer those with strong academic backgrounds. Infosys admires advisorial or consultancy expertise. Cognizant has a policy to rope in those with operational experience or with strategy expertise. Meanwhile, the compositions of Wipro’s and TCS’ boards are eclectic.

Ask Satyam why it prefers academically successful people and its CFO, Mr V. Srinivas, says, “It is not by design. Our directors joined the board at different times.” It so happened that the ones it found at every interval happened to be the ones it most wanted.

Says Mr Srinivas, “What matters to us is the ability of an independent director to speak his mind, without being in awe of the promoters.”

Cognizant says it has a policy to bring in directors with prior experience in operations or strategy. Says Mr Lakshmi Narayanan, Vice-Chairman and Board Member, “It is essential that they have run companies themselves. Particularly, they must have experience in scaling up operations.”

Interestingly, Cognizant uses the services of ‘director-search companies’ much like headhunter companies! Says Mr Narayanan, “We decide on the profile we want, identify the person and go after him.”

“The India factor is an attraction.” India is an emerging economy with promise of opportunities. When prospects hear that a directorship could mean professionally visiting India for board meetings every other year, that decides it, he says.

Interestingly, sources in the industry say that it is difficult to get quality independent directors. If they are still active, calendars don’t match. If they are retired, they do not want to come back to the limelight. Further, their accountability has of late increased. For instance, the chairman of the audit committee has to be an independent director. They even have to answer questions posed at AGMs. It is no more a case of, as one senior executive in the IT industry puts it, “Come have a cup of coffee, have a good chat for a couple of hours and return home.”

For Wipro, as it is for Infosys and TCS, global representation is key. Says Mr Suresh Senapaty, CFO, “At one point when we were turning global, we wanted to bring in that perspective.”

Diverse strategists

Satyam’s board includes Dr Krishna G. Palepu of Harvard; Dr Mangalam Srinivasan with professorial experience; Prof V.S. Raju, formerly Director at IIT Madras; and Dr Rammohan Rao, Dean of ISB.

Cognizant’s board includes Mr Robert Weissman, who was Chairman and CEO, IMS Health and CEO of Dun & Bradstreet; Mr Tom Wendel, Co-Founder and Finance Officer, DiabetesPortal.com; Mr John E. Klein, CEO and President, Polarex Inc; and Mr Robert W. Howe, Chairman, ADS Financial Services Solutions.

Wipro’s other directors include Prof Jagadish Sheth; Mr N. Vaghul, Chairman, ICICI; Dr Ashok Ganguly, Chairman of ICICI FirstSource; and Mr P.M. Sinha, who was with Levers’ and Pepsi, in addition to a legal expert.

Infosys’ board includes Prof Jeffrey Sean Lehman (Law specialist), Mr Sridar Iyengar (Accounting, with US perspective), Dr Marti G. Subrahmanyam (Finance and Economics), Ms Rama Bijapurkar (Strategy and Consumer consultant), Mr Deepak M. Satwalekar (brings CEO’s perspective), Dr Omkar Goswami (Economist) and Mr Claude Smadja (Strategic Advisor, brings in the Europe perspective).

TCS’ independent directors include Mr Naresh Chandra, former Advisor to the Prime Minister of India; Mr Aman Mehta, formerly with HSBC; Mr Venkatraman Thyagarajan, In-charge of Asia-Pacific operations of GlaxoSmithKline; and Prof Clayton M. Christensen.

It had a Japanese gentleman on board who has since moved on. It now has Mr Bill Owens from the US who is also on the boards of Nortel and Chrysler.

Asked if those with operational experience in IT were not missing, Mr Senapaty says, “IT industry, unlike consumer care or manufacturing, is evolving. It is not like there are others who have done something in IT that we would like to emulate. In fact, the likes of IBM and Accenture are reorienting themselves on our lines.”

Mr S. Gopalakrishnan – CEO and Managing Director of Infosys Technologies, says, “Our team comprises technology, business and social visionaries who provide a direction to us.”

For TCS, “A case in point is Ms Laura Cha, Hong Kong, who brings extensive regulatory experience, while Dr Ron Sommer, former Chairman of the board of management of Deutsche Telekom, brings his extensive experience in telecom and of the European market, in particular,” says the company’s Executive Director, HR, Mr S. Padmanabhan.

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