The Murugappa Group has a corporate governance policy
that promotes the highest levels of transparency and accountability
to all stakeholders. It is a system by which all business corporations
within the Group are directed and controlled. It deals with laws,
procedures, practices and implicit rules that determine the Group
company's ability to take informed managerial decisions vis-a-vis
its principal stakeholders shareholders, creditors, customers,
the state and employees.
Our corporate governance policy includes:
||An independent and effective board
||Good audit process and reporting
||Participation of shareholders in
||Maximising shareholder value
||Meeting social obligations
The Murugappa Group is committed to the highest standards
of corporate governance in all its activities and processes. It
is one of the first Indian corporates to begin the process of transformation
from being a family-owned business to a professionally managed organisation.
In January 2004, on attaining the age of retirement, M V Subbiah
a family member relinquished his office and ceased
to be part of the Murugappa Corporate Board (MCB). This was the
logical conclusion of a process of transformation that began in
November 1999, when the Murugappa Corporate Board (MCB) was formed
with family members and three independent directors. The various
businesses were entrusted to competent professional CEOs from outside
In April 2001, Subbiah stepped down as chairman and
handed over the reins to N S Raghavan, a non-family professional
who became the non-executive chairman of the Murugappa Corporate
Board. In October 2002, yet another professional P S Pai
took over as executive chairman from Raghavan, who continues
to be a director on the MCB.On completion of his tenure, P S Pai
handed over charge to M A Alagappan, Vice Chairman and Director
Strategy. M A Alagappan assumed the office of Executive Chairman
of Murugappa Group on 25 October 2006. Effective the same date,
A Vellayan, Director Marketing took over as Vice Chairman
and Director -Strategy. A Vellayan succeeded MA Alagappan as the Executive Chairman and M M Murugappan the Vice Chairman on November 1, 2009.
The Murugappa Group's disclosure norms are ahead of
Indian standards and are moving towards international practices.
The boards of Group companies comprise eminent individuals from
various disciplines, more than half being independent directors.
Each board has an audit committee, where directors,
management and auditors deal with matters relating to financial
reporting obligations, internal controls, review of accounting policies,
and management of financial risks. It monitors compliance with laws,
regulations and its own code of business conduct. The scope of the
activities of the audit committee includes all matters set out in
Clause 49 of the listing agreements with the stock exchanges, read
with Section 292A of the Companies Act, 1956.
The shareholders / investors grievance committee handles
redress of shareholder and investor complaints like transfer of
shares, non-receipt of balance sheet, and non-receipt of declared
dividends. It usually meets four times a year.
The remuneration and nomination committee recommends
the salary (including annual increments, perquisites and commission
/ incentives) as well as retirement and other benefits to be paid
to the company's managing / wholetime director (MD / WTD), other
directors and senior management, within the overall ceiling fixed
by the board. It also recommends appointments, reappointments and
the tenure of office of executive and non-executive directors.
The management committee takes decisions about policies
and other important issues concerning the management.
The whistleblower policy, introduced by the director
HR and approved by the Murugappa Corporate Board (MCB), strengthens
the Murugappa Group's Corporate Governance Policy by providing
employees and other stakeholders an independent and safe
communication channel to raise serious concerns. The policy is being
adopted separately by each company statutory board in the Group. The
policy will cover all Murugappa Group companies including associate
companies and joint ventures. Its scope extends to employees,
customers, suppliers and contractors.
The ombudsman receives all
complaints under this policy and ensures appropriate action. He is
authorised by the Management Committee Board and the Statutory
The Group companies have obtained the approval of
their members for allowing shareholders to vote on important issues
such as alteration in the memorandum of association, sale of whole
or a substantial part of the undertaking; sale of investments exceeding
25 per cent of equity; issue of shares through preferential allotment
or private placement; corporate restructuring, by postal ballot.
Each year all listed Group companies file a report
on corporate governance, making all statutory disclosures. Half-yearly
reports are sent to each shareholder's residence. Quarterly results
are widely publicised, including on the companies' websites.