Wipro : NYSE Corporate Governance Report 2020(PDF)

COMPLIANCE REPORT WITH THE FINAL CORPORATE GOVERNANCE RULES OF THE NEW YORK STOCK EXCHANGE (NYSE) AS APPROVED BY THE SECURITIES & EXCHANGE COMMISSION ON NOVEMBER 4, 2003 AS MODIFIED ON NOVEMBER 3, 2004, AUGUST 26, 2009, NOVEMBER 25, 2009 AND JANUARY 11, 2013 AND CODIFIED IN SECTION 303A OF THE NYSE LISTED COMPANY MANUAL FOR THE YEAR ENDED MARCH 31, 2020

The New York Stock Exchange's Board of Directors approved significant changes in its listing standards in 2002, aimed at restoring investor confidence by strengthening corporate governance practices. Companies listed on the NYSE must comply with these Corporate Governance standards which are codified in Section 303A of the NYSE Listed Companies Manual. Though some of the requirements are not applicable, the company's governance policies and practices are generally in compliance with the practices applicable to domestic companies though some of the practices may be different from domestic company's practices as explained in Para 303A.11.

Listed companies that are foreign private issuers (as such term is defined in Rule 3b-4 of the Securities Exchange Act, 1934, as amended (the "Exchange Act") are permitted to follow their home country practices in lieu of the provisions of Section 303A, except that such companies are required to comply with the requirements of Sections 303A.06, 303A.11 and 303A.12 (b) and (c).

A compliance report on the Corporate Governance Standards as codified in Section 303A of the NYSE Listed Company Manual as of March 31, 2020 is presented below:

• 1. Listed companies must have a majority of independent directors (303A.01)

  The Board of Directors (the "Board") of Wipro Limited (the "Company") is comprised of six Independent Non-Executive Directors out of a total of nine directors as of March 31, 2020.

• 2. No director qualifies as "independent" unless the board of directors affirmatively determines that the director has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). (303A.02(a)(i))

  Six directors on the board are Independent Directors and satisfy the qualifying criteria of Independent Directors' as described by this rule. The Board Governance, Nomination and Compensation Committee evaluates independence and recommends appointment of the Independent Directors to the Board.

  In addition, in affirmatively determining the independence of any director who will serve on the compensation committee of the listed company's board of directors, the board of directors must consider all factors specifically relevant to determining whether a director has a relationship to the listed company which is material to that director's ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to:

  • A. the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the listed company to such director; and

  • B. whether such director is affiliated with the listed company, a subsidiary of the listed company or an affiliate of a subsidiary of the listed company. (303A.02(a)(ii))

The members of the Board Governance, Nomination and Compensation Committee comprise of Independent Directors and these Independent Directors provide an annual declaration to the Company that, apart from receiving directors' remuneration, they do not have any pecuniary relationship with the Company which may affect their independence and that they are not affiliated with a subsidiary company of the Company or an affiliate of a subsidiary of the Company.

In addition, a Director is not independent if-

• i. The director is or has been within the last three years, an employee of the listed company or an immediate family member is, or has been within the last three years, an executive officer, of the listed company. (303A.02(b)(i))

  None of our existing Independent Directors or their immediate family members has held the office as an executive officer in the Company within the last three years.

• ii. The director has received or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the listed company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service) (303A.02(b)(ii))

  None of our Independent Directors or their immediate family member has received any direct compensation from the Company other than the remuneration by way of Commission and Board/Committee sitting fees.

(A) The director is a current partner or employee of a firm that is the listed Company's internal or external auditor; (B) the director has an immediately family member who is a current partner of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and personally works on the listed company's audit or; (D) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the listed company's audit within that time. (303A.02(b)(iii))

None of our Independent Directors or their immediate family members have ever been affiliated or employed in any of these capacities by a present or former internal or external auditor of the company at any point of time and have never participated in the firm's audit or assurance of tax compliance practice.

The director or an immediate family member, is or has been within the last three years, employed as an executive officer of another company where any of the listed company's present executive officers at the same time serves or served on that Company's compensation committee. (303A.02(b)(iv))

Within the last three years, none of our Independent Directors or their immediate family members is or has been employed as executive officers of another company where any of the Company's present executive officers simultaneously serves or served on that company's compensation committee.

The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the listed company for property or services in an amount, which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues. (303A.02(b)(v))

None of our Independent Directors, nor any of their immediate family members is a current executive officer, has made payments to or received from the Company for property or services in an amount, which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues.

3. To empower non-management directors to serve as a more effective check on management, the non-management directors of each listed company must meet at regularly scheduled executive sessions without management. (303A.03)

Non-management directors meet at scheduled executive sessions without management during every Board meeting held during the year. The executive sessions were, until July 31, 2019, presided by Mr. N. Vaghul, our lead Independent Director. Mr. N. Vaghul retired from the Board with effect from July 31, 2019. Thereafter, Mr. M. K. Sharma, our lead Independent Director, presided the executive sessions for remainder of the fiscal year.

Listed companies must have a nominating/corporate governance committee composed entirely of independent directors. (303A.04(a))

The nominating/corporate governance committee must have a written charter that addresses:

i. the committee's purpose and responsibilities - which, at minimum, must be to: identify individuals qualified to become board members, consistent with criteria approved by the board, and to select, or to recommend that the board select, the director nominees for the next annual meeting of shareholders; develop and recommend to the board a set of corporate governance guidelines applicable to the corporation; and oversee the evaluation of the board and management; and

ii. an annual performance evaluation of the committee. (303A.04(b))

Listed companies must have a compensation committee composed entirely of independent directors. Compensation committee members must satisfy the additional independence requirements specific to compensation committee membership set forth in Section 303A.02(a)(ii). (303A.05(a))

The compensation committee must have a written charter that addresses:

• (i) the committee's purpose and responsibilities - which, at minimum, must be to have direct responsibility to:

  • (A) review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO's performance in light of those goals and objectives, and either as a committee or together with the other independent directors (as directed by the Board), determine and approve the CEO's compensation level based on this evaluation;

  • (B) make recommendations to the Board with respect to non-CEO executive officer compensation and incentive-compensation and equity based plans that are subject to Board approval; and

  • (C) prepare the disclosure required by Item 407(e)(5) of Regulation S-K;

• (ii) an annual performance evaluation of the compensation committee.

(iii) the rights and responsibilities of the Compensation Committee set forth in Section 303A.05(c). (303A.05(b))

Board Governance, Nomination and Compensation Committee

As of March 31, 2020, the Board Governance, Nomination and Compensation Committee is comprised of the following members: Mr. William Arthur Owens (Chairman of the Board Governance, Nomination and Compensation Committee); Mr. M. K. Sharma and Ms. Ireena Vittal (Members of the Board Governance, Nomination and Compensation Committee). All members of the Board Governance, Nomination and Compensation Committee are Independent Non-Executive Directors.

The charter of Board Governance, Nomination and Compensation Committee is available on our website at:

https://www.wipro.com/content/dam/nexus/en/investor/corporate-governance/charters/charters-of-the-committees/12721-the-board-governance-nomination-and-compensation-committee.pdf

Performance Evaluation

In line with the Corporate Governance Guidelines of the Company, the Annual Performance Evaluation was conducted for all Board Members as well as the Board and its Committees. This evaluation was led by the Chairman of the Board Governance, Nomination and Compensation Committee with a specific focus on the performance and effective functioning of the Board. The Board evaluation framework has been designed in compliance with the requirements under the Indian Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and in consonance with Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India (SEBI) in January 2017. Disclosure on Board evaluation is provided in our annual report 2019-20 and is available athttps://www.wipro.com/investors/annual-reports/.

The compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser. (303A.05(c)(i)).

The compensation committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation consultant, independent legal counsel or other adviser retained by the compensation committee. (303A.05(c)(ii))

The listed company must provide for appropriate funding, as determined by the compensation committee, for payment of reasonable compensation to a compensation consultant, independent legal counsel or any other adviser retained by the compensation committee. (303A.05(c)(iii))

The compensation committee may select a compensation consultant, legal counsel or other adviser to the compensation committee only after taking into consideration, all factors relevant to that person's independence from management, including the following:

• (A) The provision of other services to the listed company by the person that employs the compensation consultant, legal counsel or other adviser;

• (B) The amount of fees received from the listed company by the person that employs the compensation consultant, legal counsel or other adviser, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other adviser;

(C) The policies and procedures of the person that employs the compensation consultant, legal counsel or other adviser that are designed to prevent conflicts of interest;

• (D) Any business or personal relationship of the compensation consultant, legal counsel or other adviser with a member of the compensation committee;

• (E) Any stock of the listed company owned by the compensation consultant, legal counsel or other adviser; and

• (F) Any business or personal relationship of the compensation consultant, legal counsel, other adviser or the person employing the adviser with an executive officer of the listed company. (303A.05(c)(iv))

The charter of the Board Governance, Nomination and Compensation Committee of the Company provides for the engagement by the Committee of compensation consultants and other advisers from time to time. During the year, the Board Governance, Nomination and Compensation Committee has not engaged the services of any such compensation consultants.

Listed companies must have an audit committee that satisfies the requirements of Rule 10A-3 under the Exchange Act. (303A.06)

Our Company has an Audit, Risk and Compliance Committee that satisfies the requirements of Rule 10A-3 under the Exchange Act.

The audit committee must have a minimum of three members. All audit committee members must satisfy the requirements for independence set out in Section 303A.02 and in the absence of an applicable exemption, Rule 10A-3(b)(1). (303A.07(a))

The Company's Audit, Risk and Compliance Committee of the Board is comprised of three Independent Directors as of March 31, 2020.

In addition to any requirement of Rule 10A-3(b)(1), all audit committee members must satisfy the requirements for independence set out in Section 303A.02 and in the absence of an applicable exemption, Rule 10A-3(b)(1). (303A.07(b))

The members of the Audit, Risk and Compliance Committee satisfy all the requirements set out in Section 303A.02. Rule 10A 3(b)(i) is not applicable.

The audit committee must have a written charter that addresses:

(i) the committee's purpose - which, at minimum, must be to:

(A) assist board oversight of (1) the integrity of the Listed company's financial statements,

(2) the Listed company's compliance with legal and regulatory requirements, (3) the independent auditor's qualifications and independence, and (4) the performance of the Listed company's internal audit function and independent auditors; and (303A.07(c)(i)(A))

The charter of Audit, Risk and Compliance Committee is available on our website at:

https://www.wipro.com/content/dam/nexus/en/investor/corporate-governance/charters/charters-of-the-committees/12720-the-audit-Risk-and-Compliance-Committee.pdf