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Wipro gets top corp governance rating
January 28, 2004 17:45 IST
Software major Wipro on Wednesday became the first entity to get the credit rating agency ICRA's highest category 'SVG1' rating for stakeholders value creation and governance practices.
The rating reflected Wipro's sound corporate governance practices as evident from the composition of its board of directors (with independent directors being majority), the increasing and active involvement of the board in strategic issues and the company's improving transparency and disclosure standards, ICRA said in a statement.
ICRA factored in Wipro's satisfactory relationship with key stakeholders, including employees, customers and creditors, and its 'superior' financial performance.
The rating also considered the high promoter holding in Wipro and the impact of the same on the liquidity of its scrip, besides the current lack of segregation between the roles of its chairman and CEO.
"While Wipro's track record of diversification does not show uniform success (Wipro Net and Wipro Finance, among some others, are cases in point), currently there is far greater board participation in the company's business strategy making, which focuses significantly on inorganic growth," ICRA said.
The positive features of governance at Wipro were its strong internal audit system, well-established contract management and risk evaluation/mitigation system, and clear 'standard operating procedures' for a number of critical processes, it said.
On the issue of high employee attrition, a phenomenon that has come to characterise the IT industry, ICRA was of the opinion that 'Wipro does not compare adversely with its domestic peers.'