Corporate governance of tata group

Tata Code of Conduct

This comprehensive document
serves as the ethical road map for
Tata employees and companies,
and provides the guidelines by
which the group conducts its
businesses.
Clause 1 Clause 2 Clause 3 Clause 4 Clause 5
Clause 6 Clause 7 Clause 8 Clause 9 Clause 10
Clause 11 Clause 12 Clause 13 Clause 14 Clause 15
Clause 16 Clause 17 Clause 18 Clause 19 Clause 20
Clause 21 Clause 22 Clause 23 Clause 24 Clause 25
Clause:1
National interest
The Tata group is committed to benefit the economic
development of the countries in which it operates. No Tata
company shall undertake any project or activity to the
detriment of the wider interests of the communities in which it
operates.

A Tata company’s management practices and business

conduct shall benefit the country, localities and communities
in which it operates, to the extent possible and affordable,
and shall be in accordance with the laws of the land.

A Tata company, in the course of its business activities, shall

respect the culture, customs and traditions of each country
and region in which it operates. It shall conform to trade
procedures, including licensing, documentation and other
necessary formalities, as applicable.

Clause:2
Financial reporting and records
A Tata company shall prepare and maintain its accounts
fairly and accurately and in accordance with the accounting
and financial reporting standards which represent the
generally accepted guidelines, principles, standards, laws
and regulations of the country in which the company
conducts its business affairs.

Internal accounting and audit procedures shall reflect, fairly

and accurately, all of the company’s business transactions
and disposition of assets, and shall have internal controls to
provide assurance to the company’s board and shareholders
that the transactions are accurate and legitimate. All required
information shall be accessible to company auditors and
other authorised parties and government agencies.There
shall be no willful omissions of any company transactions
from the books and records, no advance-income recognition
and no hidden bank account and funds.

Any willful, material misrepresentation of and / or

misinformation on the financial accounts and reports shall be
regarded as a violation of the Code, apart from inviting
appropriate civil or criminal action under the relevant laws.
No employee shall make, authorise, abet or collude in an
improper payment, unlawful commission or bribing.

Clause:3
Competition
A Tata company shall fully support the development and
operation of competitive open markets and shall promote the
liberalisation of trade and investment in each country and
market in which it operates. Specifically, no Tata company or
employee shall engage in restrictive trade practices, abuse
of market dominance or similar unfair trade activities.

A Tata company or employee shall market the company’s

products and services on their own merits and shall not
make unfair and misleading statements about competitors’
products and services. Any collection of competitive
information shall be made only in the normal course of
business and shall be obtained only through legally
permitted sources and means.

Clause:4
Equal opportunities employer
A Tata company shall provide equal opportunities to all its
employees and all qualified applicants for employment
without regard to their race, caste, religion, colour, ancestry,
marital status, gender, sexual orientation, age, nationality,
ethnic origin or disability.

Human resource policies shall promote diversity and equality

in the workplace, as well as compliance with all local labour
laws, while encouraging the adoption of international best
practices.

Employees of a Tata company shall be treated with dignity

and in accordance with the Tata policy of maintaining a work
environment free of all forms of harassment, whether
physical, verbal or psychological. Employee policies and
practices shall be administered in a manner consistent with
applicable laws and other provisions of this Code, respect for
the right to privacy and the right to be heard, and that in all
matters equal opportunity is provided to those eligible and
decisions are based on merit.

Clause:5
Gifts and donations
A Tata company and its employees shall neither receive nor
offer or make, directly or indirectly, any illegal payments,
remuneration, gifts, donations or comparable benefits that
are intended, or perceived, to obtain uncompetitive favours
for the conduct of its business. The company shall cooperate
with governmental authorities in efforts to eliminate all forms
of bribery, fraud and corruption.

However, a Tata company and its employees may, with full

disclosure, accept and offer nominal gifts, provided such gifts
are customarily given and / or are of a commemorative
nature. Each company shall have a policy to clarify its rules
and regulations on gifts and entertainment, to be used for the
guidance of its employees.

Clause:6
Government agencies
A Tata company and its employees shall not, unless
mandated under applicable laws, offer or give any company
funds or property as donation to any government agency or
its representative, directly or through intermediaries, in order
to obtain any favourable performance of official duties. A
Tata company shall comply with government procurement
regulations and shall be transparent in all its dealings with
government agencies.

Clause:7
Political non-alignment
A Tata company shall be committed to and support the
constitution and governance systems of the country in which
it operates.
A Tata company shall not support any specific political party
or candidate for political office. The company’s conduct shall
preclude any activity that could be interpreted as mutual
dependence / favour with any political body or person, and
shall not offer or give any company funds or property as
donations to any political party, candidate or campaign.

Clause:8
Health, safety and environment
A Tata company shall strive to provide a safe, healthy, clean
and ergonomic working environment for its people. It shall
prevent the wasteful use of natural resources and be
committed to improving the environment, particularly with
regard to the emission of greenhouse gases, and shall
endeavour to offset the effect of climate change in all
spheres of its activities.

A Tata company, in the process of production and sale of its

products and services, shall strive for economic, social and
environmental sustainability.

Clause:9
Quality of products and services
A Tata company shall be committed to supply goods and
services of world class quality standards, backed by after-
sales services consistent with the requirements of its
customers, while striving for their total satisfaction. The
quality standards of the company’s goods and services shall
meet applicable national and international standards.

A Tata company shall display adequate health and safety

labels, caveats and other necessary information on its
product packaging.   

Clause:10
Corporate citizenship
A Tata company shall be committed to good corporate
citizenship, not only in the compliance of all relevant laws
and regulations but also by actively assisting in the
improvement of quality of life of the people in the
communities in which it operates. The company shall
encourage volunteering by its employees and collaboration
with community groups.
Tata companies are also encouraged to develop systematic
processes and conduct management reviews, as stated in
the Tata ‘corporate sustainability protocol’, from time to time
so as to set strategic direction for social development
activity.

The company shall not treat these activities as optional, but

should strive to incorporate them as an integral part of its
business plan.

Clause:11
Cooperation of Tata companies
A Tata company shall cooperate with other Tata companies
including applicable joint ventures, by sharing knowledge
and physical, human and management resources, and by
making efforts to resolve disputes amicably, as long as this
does not adversely affect its business interests and
shareholder value.

In the procurement of products and services, a Tata

company shall give preference to other Tata companies, as
long as they can provide these on competitive terms relative
to third parties.

Clause:12
Public representation of the company and the group
The Tata group honours the information requirements of the
public and its stakeholders. In all its public appearances, with
respect to disclosing company and business information to
public constituencies such as the media, the financial
community, employees, shareholders, agents, franchisees,
dealers, distributors and importers, a Tata company or the
Tata group shall be represented only by specifically
authorised directors and employees. It shall be the sole
responsibility of these authorised representatives to disclose
information about the company or the group.

Clause:13
Third party representation
Parties which have business dealings with the Tata group
but are not members of the group, such as consultants,
agents, sales representatives, distributors, channel partners,
contractors and suppliers, shall not be authorised to
represent a Tata company without the written permission of
the Tata company, and / or if their business conduct and
ethics are known to be inconsistent with the Code.

Third parties and their employees are expected to abide by

the Code in their interaction with, and on behalf of, a Tata
company. Tata companies are encouraged to sign a non-
disclosure agreement with third parties to support
confidentiality of information.

Clause:14
Use of the Tata brand
The use of the Tata name and trademark shall be governed
by manuals, codes and agreements to be issued by Tata
Sons. The use of the Tata brand is defined in and regulated
by the Tata Brand Equity and Business Promotion
agreement. No third party or joint venture shall use the Tata
brand to further its interests without specific authorisation.

Clause:15
Group policies
A Tata company shall recommend to its board of directors
the adoption of policies and guidelines periodically
formulated by Tata Sons.

Clause:16
Shareholders
A Tata company shall be committed to enhancing
shareholder value and complying with all regulations and
laws that govern shareholder rights.The board of directors of
a Tata company shall duly and fairly inform its shareholders
about all relevant aspects of the company’s business, and
disclose such information in accordance with relevant
regulations and agreements.

Clause:17
Ethical conduct
Every employee of a Tata company, including full-time
directors and the chief executive, shall exhibit culturally
appropriate deportment in the countries they operate in, and
deal on behalf of the company with professionalism, honesty
and integrity, while conforming to high moral and ethical
standards. Such conduct shall be fair and transparent and be
perceived to be so by third parties.

Every employee of a Tata company shall preserve the

human rights of every individual and the community, and
shall strive to honour commitments.

Every employee shall be responsible for the implementation

of and compliance with the Code in his / her environment.
Failure to adhere to the Code could attract severe
consequences, including termination of employment.

Clause:18
Regulatory compliance
Employees of a Tata company, in their business conduct,
shall comply with all applicable laws and regulations, in letter
and spirit, in all the territories in which they operate. If the
ethical and professional standards of applicable laws and
regulations are below that of the Code, then the standards of
the Code shall prevail.

Directors of a Tata company shall comply with applicable

laws and regulations of all the relevant regulatory and other
authorities. As good governance practice they shall
safeguard the confidentiality of all information received by
them by virtue of their position.

Clause:19
Concurrent employment
Consistent with applicable laws, an employee of a Tata
company shall not, without the requisite, officially written
approval of the company, accept employment or a position of
responsibility (such as a consultant or a director) with any
other company, nor provide freelance services to anyone,
with or without remuneration. In the case of a full-time
director or the chief executive, such approval must be
obtained from the board of directors of the company.

Clause:20
Conflict of interest
An employee or director of a Tata company shall always act
in the interest of the company, and ensure that any business
or personal association which he / she may have does not
involve a conflict of interest with the operations of the
company and his / her role therein. An employee, including
the executive director (other than independent director) of a
Tata company, shall not accept a position of responsibility in
any other non-Tata company or not-for-profit organisation
without specific sanction.

The above shall not apply to (whether for remuneration or

otherwise):
a) Nominations to the boards of Tata companies, joint
ventures or associate companies.
b) Memberships / positions of responsibility in educational /
professional bodies, wherein such association will benefit the
employee / Tata company.
c) Nominations / memberships in government committees /
bodies or organisations.
d) Exceptional circumstances, as determined by the
competent authority.

Competent authority, in the case of all employees, shall be

the chief executive, who in turn shall report such exceptional
cases to the board of directors on a quarterly basis. In case
of the chief executive and executive directors, the Group
Corporate Centre shall be the competent authority.

An employee or a director of a Tata company shall not

engage in any business, relationship or activity which might
conflict with the interest of his / her company or the Tata
group. A conflict of interest, actual or potential, may arise
where, directly or indirectly…
a) An employee of a Tata company engages in a
business, relationship or activity with anyone who is
party to a transaction with his / her company.
b) An employee is in a position to derive an improper benefit,
personally or to any of his / her relatives, by making or
influencing decisions relating to any transaction.
c) An independent judgement of the company’s or group’s
best interest cannot be exercised.

The main areas of such actual or potential conflicts of

interest shall include the following:
a) An employee or a full-time director of a Tata
company conducting business on behalf of his / her
company or being in a position to influence a decision with
regard to his / her company’s business with a supplier or
customer where his / her relative is a principal officer or
representative, resulting in a benefit to him / her or his / her
relative.
b) Award of benefits such as increase in salary or other
remuneration, posting, promotion or recruitment of a relative
of an employee of a Tata company, where such an individual
is in a position to influence decisions with regard to such
benefits.
c) The interest of the company or the group can be
compromised or defeated.

Notwithstanding such or any other instance of conflict of

interest that exist due to historical reasons, adequate and full
disclosure by interested employees shall be made to the
company’s management. It is also incumbent upon every
employee to make a full disclosure of any interest which the
employee or the employee’s immediate family, including
parents, spouse and children, may have in a family business
or a company or firm that is a competitor, supplier, customer
or distributor of or has other business dealings with his / her
company.

Upon a decision being taken in the matter, the employee

concerned shall be required to take necessary action, as
advised, to resolve / avoid the conflict.

If an employee fails to make the required disclosure and the

management of its own accord becomes aware of an
instance of conflict of interest that ought to have been
disclosed by the employee, the management shall take a
serious view of the matter and consider suitable disciplinary
action against the employee.

Clause:21
Securities transactions and confidential information
An employee of a Tata company and his / her immediate
family shall not derive any benefit or counsel, or assist others
to derive any benefit, from access to and possession of
information about the company or group or its clients or
suppliers that is not in the public domain and, thus,
constitutes unpublished, price-sensitive insider information.

An employee of a Tata company shall not use or proliferate

information that is not available to the investing public, and
which therefore constitutes insider information, for making or
giving advice on investment decisions about the securities of
the respective Tata company, group, client or supplier on
which such insider information has been obtained.

Such insider information might include (without limitation) the

following:

 Acquisition and divestiture of businesses or

business units.
 Financial information such as profits, earnings and
dividends.
 Announcement of new product introductions or
developments.
 Asset revaluations.
 Investment decisions / plans.
 Restructuring plans.
 Major supply and delivery agreements.
 Raising of finances.

An employee of a Tata company shall also respect and

observe the confidentiality of information pertaining to other
companies, their patents, intellectual property rights,
trademarks and inventions; and strictly observe a practice of
non-disclosure.

Clause:22
Protecting company assets
The assets of a Tata company shall not be misused; they
shall be employed primarily and judiciously for the purpose
of conducting the business for which they are duly
authorised. These include tangible assets such as
equipment and machinery, systems, facilities, materials and
resources, as well as intangible assets such as information
technology and systems, proprietary information, intellectual
property, and relationships with customers and suppliers.

Clause:23
Citizenship
The involvement of a Tata employee in civic or public affairs
shall be with express approval from the chief executive of his
/ her company, subject to this involvement having no
adverse impact on the business affairs of the company or the
Tata group.

Clause:24
Integrity of data furnished
Every employee of a Tata company shall ensure, at all times,
the integrity of data or information furnished by him/her to the
company. He/she shall be entirely responsible in ensuring
that the confidentiality of all data is retained and in no
circumstance transferred to any outside person/party in the
course of normal operations without express guidelines from
or, the approval of the management.

Clause:25
Reporting concerns
Every employee of a Tata company shall promptly report to
the management, and / or third-party ethics helpline, when
she / he becomes aware of any actual or possible violation of
the Code or an event of misconduct, act of misdemeanour or
act not in the company’s interest. Such reporting shall be
made available to suppliers and partners, too.

Any Tata employee can choose to make a protected

disclosure under the whistleblower policy of the company,
providing for reporting to the chairperson of the audit
committee or the board of directors or specified authority.
Such a protected disclosure shall be forwarded, when there
is reasonable evidence to conclude that a violation is
possible or has taken place, with a covering letter, which
shall bear the identity of the whistleblower.

The company shall ensure protection to the whistleblower

and any attempts to intimidate him / her would be treated as
a violation of the Code.

Note:

The TCoC does not provide a full, comprehensive and

complete explanation of all the rules that employees are
bound to follow. Employees have a continuing obligation to
familiarise themselves with all applicable laws, company
policies, procedures and work rules.

All JVs could adopt TCoC or a joint code of conduct

incorporating all elements of the TCoC.

This version of the TCoC supersedes all earlier versions and

associated documents and stands effective from October 1,
2008.