CORPORATE GOVERNANCE
A separate section on Corporate Governance forming part of the Board's Report and the certificate from the Practicing Company Secretary confirming compliance of Corporate Governance norms as stipulated in Regulation 34 read along with Schedule V of the SEBI Listing Regulations is included in the Annual Report.
DIRECTORS
Appointment
During the year under review, on the recommendation of Nomination and Remuneration Committee ("NRC") and in accordance with provisions of Section 161 of the Act, Mr Guenter Butschek was appointed as an Additional Director with effect from February 15, 2016 and holds office upto the date of the forthcoming Annual General Meeting ("AGM") and being eligible has offered himself for appointment as Director. Mr Butschek is appointed as Chief Executive Officer and Managing Director of the Company for a period of 5 years with effect from February 15, 2016, subject to approval of Members and the Central Government.
Re-appointment
Mr Ravindra Pisharody, Executive Director (Commercial Vehicles) is being re-appointed w.e.f July 1, 2016 upto November 24, 2020 (upon the termination of the existing contract w.e.f July 1, 2016) and in accordance with the provisions of the Act and the Articles of Association of the Company, Mr Pisharody retires by rotation and is eligible for re-appointment.Mr Satish Borwankar, Executive Director (Quality) is being re-appointed w.e.f July 1, 2016 upto July 15, 2017 (upon the termination of the existing contract w.e.f July 1, 2016).
There was no change in the composition of the Board during Fiscal 2016, other than appointment of Mr Butschek,
CEO and Managing Director of the Company.
The disclosures required pursuant to Regulation 36 of SEBI Listing Regulations are given in the Notice of the AGM, forming part of the Annual Report and disclosure pursuant to Schedule V, Part II, proviso of Section II B(iv)IV of the Act and Schedule V of SEBI Listing Regulations is annexed hereto as Annexure 4.
Attention of the Members is invited to the relevant items in the Notice of the AGM and the Explanatory Statement thereto.
Independent Directors
Pursuant to the provisions of Section 149 of the Act read along with the Rules framed thereunder and the Resolutions passed by the Members at the Annual General Meeting held on July 31, 2014, Mr N Munjee, Mr V K Jairath and Ms Falguni Nayar would continue as Independent Directors upto July 30, 2019. Mr Nusli Wadia, Dr Raghunath Mashelkar and Mr Subodh Bhargava would continue as Independent Directors upto February 14, 2019, December 31, 2017 and March 29, 2017, respectively, as per the Governance Guidelines adopted by the Company. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16 of the SEBI Listing Regulations.
KEY MANAGERIAL PERSONNEL
During the year under review, the Company designated Mr Guenter Butschek as Chief Executive Officer and Managing Director of the Company as one of the Key Managerial Personnel (KMP), under Section 203 of the Act, with effect from February 15, 2016. The following Directors/Executives continued as KMPs of the Company during Fiscal 2016:
- Mr Ravindra Pisharody, Executive Director (Commercial Vehicles)
- Mr Satish Borwankar, Executive Director (Quality)
- Mr C Ramakrishnan, Group Chief Financial Officer*
- Mr Hoshang Sethna, Company Secretary
* (Superannuated on June 30, 2015 and Re appointed as Group Chief Financial Officer w.e.f. July 1, 2015)
GOVERNANCE GUIDELINES
During the year under review, the Company adhered to the Governance Guidelines on Board Effectiveness. The Governance Guidelines cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, director term, retirement age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of directors, director remuneration, subsidiary oversight, Code of Conduct, Board Effectiveness Review and Mandates of Board Committees.
Selection and procedure for nomination and appointment of Directors
The NRC is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.
The NRC conducts a gap analysis to refresh the Board on a periodic basis, including each time a Director's appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the CVs of potential candidates vis-à-vis the required competencies, undertake a reference and due diligence and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.
Criteria for Determining Qualifications, Positive Attributes and Independence of a Director
The NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178(3) of the Act and Regulation 19 read along with Schedule II of SEBI Listing Regulations, which is annexed as Annexure 5.
REMUNERATION POLICY
The Company has in place a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and Regulation 19 of SEBI Listing Regulations, and the same is annexed as Annexure 6.
BOARD EVALUATION
Pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by SEBI Listing Regulations, the Board has carried out an annual evaluation of its own performance and that of its Committees and individual Directors.The performance of the Board and individual Directors was evaluated by the Board seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board seeking inputs from the Committee Members. The NRC reviewed the performance of the individual Directors, a separate meeting of Independent Directors was also held to review the performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman of the Company, taking into account the views of CEO and MD, Executive Directors and Non-Executive Directors. This was followed by a Board Meeting that discussed the performance of the Board, its Committees and individual Directors.
The criteria for performance evaluation of the Board included aspects like Board composition and structure, effectiveness of Board processes, information and functioning etc. The criteria for performance evaluation of Committees of the Board included aspects like composition of Committees, effectiveness of Committee meetings etc. The criteria for performance evaluation of the individual Directors included aspects on contribution to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc. In addition, the Chairman was also evaluated on the key aspects of his role.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The details of the programme for familiarisation of the Independent Directors with the Company in respect of their roles, rights, responsibilities in the Company, nature of the industry in which Company operates, business model of the Company and related matters are put up on the website of the Company. (www.tatamotors.com/investors/pdf/familiarisation-programme-independent-directors.pdf).
BOARD AND COMMITTEE COMPOSITION
Details of the composition of the Board and its Committees, Meetings held, attendance of the Directors at such Meetings and other relevant details are provided in the Corporate Governance Report.