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  • Itc Limited: Is The Corporate Governance Only Skin Deep?

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    ITC Limited is one of India's largest companies with a market capitalization over $10 billion and annual revenue of $3 billion. It has evolved from a single product company to a multi-business corporation with businesses in tobacco, hotels, paper, and international commodities trading. ITC defines corporate governance as a systematic process to enhance wealth generation and value for shareholders. Its governance structure includes strategic supervision by the board of directors, strategic management by a Corporate Management Committee, and executive management by Strategic Business Unit heads. The board has 16 members, including 4 executive and 12 non-executive directors, and meets at least 6 times per year. It has committees for audit, compensation, nominations, and investor services.

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    ITC Limited is one of India's largest companies with a market capitalization over $10 billion and annual revenue of $3 billion. It has evolved from a single product company to a multi-business corporation with businesses in tobacco, hotels, paper, and international commodities trading. ITC defines corporate governance as a systematic process to enhance wealth generation and value for shareholders. Its governance structure includes strategic supervision by the board of directors, strategic management by a Corporate Management Committee, and executive management by Strategic Business Unit heads. The board has 16 members, including 4 executive and 12 non-executive directors, and meets at least 6 times per year. It has committees for audit, compensation, nominations, and investor services.

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    441 views2 pages

    Itc Limited: Is The Corporate Governance Only Skin Deep?

    Uploaded by

    vidhi
    ITC Limited is one of India's largest companies with a market capitalization over $10 billion and annual revenue of $3 billion. It has evolved from a single product company to a multi-business corporation with businesses in tobacco, hotels, paper, and international commodities trading. ITC defines corporate governance as a systematic process to enhance wealth generation and value for shareholders. Its governance structure includes strategic supervision by the board of directors, strategic management by a Corporate Management Committee, and executive management by Strategic Business Unit heads. The board has 16 members, including 4 executive and 12 non-executive directors, and meets at least 6 times per year. It has committees for audit, compensation, nominations, and investor services.

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    ITC LIMITED: IS THE CORPORATE GOVERNANCE ONLY SKIN DEEP?

    About ITC:
    ITC is one of India’s foremost private sector companies with a market capitalisation of over 10
    billion dollars and turnover of 3 billion dollars. ITC has evolved from over the years from a
    single product company to a multi business corporation. The Vision of the company is to is to
    sustain its position as one of India’s most valuable corporations growing value for the Indian
    economy and the company’s shareholders. It has various core values that enables the company to
    be customer focused and a high performance organization that creates values for all its
    stakeholders. It’s core values include:
     Trusteeship
     Customer focus
     Respect for people
     Excellence
     Innovation
    Corporate governance at ITC:
     ITC has grown to its present status of one of India’s premier companies with a multi
    product portfolio from a single product. It has businesses that are vast and different from
    tobacco to hostels, from paper to international commodities trading. These businesses
    differ in their very nature. All these factors have influenced the form of governance at
    ITC.
     The challenge of governance for ITC lies in fashioning a model that addresses the
    uniqueness of each of its businesses and yet helps in defining the purpose of the company
    as a whole.
     ITC defines corporate governance as “A systematic process by which companies are
    directed and controlled to enhance their wealth generating capacity”.
    Core principles of ITC Corporate governance initiative:
    The initiative is based on two core principles:
    a) Management must have the executive freedom to drive the enterprise forward without the
    undue restraints.
    b) This freedom of management should be exercised within a framework of effective
    accountability.
    ITC – Governance Structure:
    The company corporate governance processes are designed to support effective management of
    multiple businesses while retaining focus on each one of them. The practice of corporate
    governance at ITC takes place at three levels:
    a) Strategic Supervision – By the board of directors
    b) Strategic management – By Corporate management committee
    c) Executive management – By Strategic business unit (SBU) Chief assisted by SBU
    management committee.
    ITC Board Structure, Committees & Board of Directors:
    ITC has a balanced mix of both executive and non-executive directors. IT has 16
    executive directors out of which 4 are executive and 12 are non-executive directors. The main
    role of directors include: Protection of trusteeship and enhancing shareholder’s value through
    strategic supervision.
    At least 6 board meetings are held in a year with an interval of 2 months. These meetings are
    governed by a structured agenda and the annual calendar of the meetings are agreed upon the
    beginning of each year. The issues mentioned in the agenda includes their background in
    formation as well. This information helps the directors to take informed decisions.
    The board has the following committees:
    1. Audit Committee: Responsible for internal control systems and financial disclosure.
    2. Compensation Committee: Recommends the compensation system to executive directors
    and top level management below them.
    3. Nomination Committee: Recommends the nomination schemes for CMC and the board
    4. Investor Services Committee: Responsible for solving problems faced by shareholders
    and investors, approval of transmissions and sub division of shares and issuing duplicate
    shares.
    5. Corporate Management Committee(CMC): Managing company’s strategy as per board’s
    approved direction or framework.
    The term of reference of these committee are determined by the board from time to time and
    their structure follows the recommendations of national and international committees of
    corporate governance.

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