Corporate Governance (Hons. 1)

ASSESSMENT PROJECT

Company: TATA Motors

Submitted to: Dr. Sujata Bali

Submitted by:
Amritam Shankar yadav
R760218115
500071424
BBA LLB (corporate law)
batch - II

TATA MOTORS
Tata Motors is a part of the Tata Group, and as the name suggests, it serves the automotive
industry. The company is headquartered in Mumbai, India and was founded in 1945 by the
visionary industrialist J.R.D. Tata. The company is a listed public company and trades on the
NSE as TATAMOTORS. The share recorded its highest value in 2015, when it was priced at Rs.
582.10. As of May 2021, the share trades at an average of Rs. 309. The company is a Fortune
Global 500 company, and earned Rs. 264,041 crore in revenue in 2020.1
The company is primarily involved in the manufacture of automobiles such as passenger cars,
trucks, vans, buses and military vehicles. Tata Motors is pioneering the shift of the automobile
industry from IC engines to electric drives in India, which is apparent from its investment of Rs.
500 cr. for setting up a separate division for electric vehicles. 2 The company has launched a few
electric models as well, such as the Tigor EV and the Nexon EV. The company has said that they
believe in a future where mobility would be without emissions, and they have solidified their
beliefs.
Tata Group has been regarded for its charitable activities ever given that its inception. Therefore,
it's far best apparent that Tata Motors being a subsidiary of the Tata Group might additionally
actively involve itself in Corporate Social Responsibility sports. Apart from the CSR Activities,
the Tata Group has ensured that every one its businesses are governed by way of a obvious
corporate governance coverage. The motive of a terrific corporate governance policy is to make
sure that a agency operates as a responsible part of the society.
This report is an try to spotlight the corporate governance practices of Tata Motors in mild of the
global and countrywide corporate governance ideas.

National Corporate Governance Principles

These principles and requirements are mentioned under the Companies Act, 2013 and SEBI Act,
1992. All references are taken from the Corporate Governance Report of the company.
1. Audit Principles and Auditing Committee
The number one cause of a organization's audit committee is to provide oversight of the
financial reporting method, the audit technique, the employer's machine of internal
controls and compliance with laws and regulations.The Audit Committee is to be
installation under S. 177 of the Companies Act, 2013 and functions in line with the SEBI
LODR Regulations, 2018. Tata Motors has complied with the requirement of 3 directors
including impartial director, but has long past a step beforehand and all four
administrators of the committee are impartial directors. In the FY 2019-20, 10
conferences of the Committee had been held which speaks volume approximately the

2
 transparency coverage. It ought to additionally be mentioned that the law does now not
make a minimum number of conferences obligatory. The Company has noted that they
rotate their audit company each five years compared to the statutory requirement of 10
years, which enhances their credibility.

2.Fair system of nomination of directors and appropriate remuneration

The Nomination and Remuneration Committee is tasked with this and it's far to be set up
under S. 178 of the Companies Act, 2013. The Committee periodically evaluations the
composition of the Board with the objective of achieving an optimal balance of size,
abilities, independence, information, age, gender and revel in.Tata Motors has set up this
committee complying with all the provisions of S. 178. There are two impartial
administrators and one non-unbiased non-govt director. In the provision, only ½ of the
directors want to be unbiased, but the committee constituted right here has 2/3
independent administrators, which reflects their transparency guidelines.

2. Risk Management
The roles and duties of the Risk Management Committee are noted in Part D of the SEBI
LODR rules. It is also cited underneath S. 134 (3) (n) of the Companies Act. This
Committee is installation to to border, put into effect and reveal the threat control plan for
the Company. While the Companies Act does no longer make the setting up of this
committee mandatory, Tata Motors has gone beforehand and constituted this separate
committee. The Committee has 1 Independent Director, Executive Director, Chief
Operating Officer, Chief Executive Officer, Managing Director and the Chief Financial
Officer. Four meetings had been held in the FY 2018-19.

3. Corporate Social Responsibility

The CSR Committee is to be installed below S. One hundred thirty five of the Companies
Act, 2013. The motive of organising this committee is to provide a framework to the
Board of Directors of CSR activities, the budget available and further to be allotted, if
any. This committee also oversees the CSR policy of the company every so often. The
CSR Committee of Tata Motors is constituted through 2 Independent Directors,
Executive Director, Chief Operating Officer, Chief Executive Officer and the Managing
Director. For Tata Motors, CSR sports are a large a part of the organization, which may
be ascertained from the truth that such high-ranking government directors represent this
committee. The CSR sports of Tata Motors is based on 7 elements, in which they are
trying to impact numerous elements of a person’s lifestyles, beginning from their delivery
to their livelihood.

4. Regulation of relationship with stakeholders

The Stakeholders Relationship Committee is to be installed underneath S. 178 of the
Companies Act and features in accordance with Regulation 20 examine with Part D of
 Schedule II of the SEBI LODR. The primary motive of this committee is to remedy
grievances of safety holders of the Company, which include proceedings related to
switch/transmission of stocks, non-receipt of annual document, non-receipt of declared
dividends, trouble of latest/replica certificates, wellknown conferences, and so forth. Tata
Motors has compiled with the requirement of this committee, and their committee is
constituted through 2 Independent Directors, theChief Executive Officer and the
Managing Director.

Global Corporate Governance Principles

Being a multinational company, and as the company likes to refer itself “citizen of the world” it
is expected that the company would follow certain international corporate governance principles,
and the Company has duly complied with them.
1. Review of safety, health and sustainability
TheSafety, Health and SustainabilityCommittee evaluations the practices of safety at
place of business, health of employees and the sustainability of its operations. Its number
one purpose is to propose a holistic approach to protection, health and sustainability
topics in choice making. It additionally frames extensive tips/policies with reference to
protection, fitness and sustainability. This committee isn't required to be installation
below Indian law and it's miles usually constituted by using corporations within the US
and EU. Tata Motors being a accountable agency has constituted this committee
considering that an car manufacturing industry uses each heavy and power tools, and the
people running such gear are constantly at danger.

2. Board Diversity
3. Tata Motors has followed a three-fold approach toward diversifying its Board of
Directors. According to the document, about 56% of its directors are Indians, while 28%
of them are European and 16% are of Middle-Eastern ethnicity. Being a multinational
corporation, having a board that represents diverse ethnicities is a must. Moreover,
approximately 25% of its directors are females. Tata Motors has ensured an awesome
combination of range and expertize to constitute its board. Board Diversity principle is
typically now not observed with the aid of organizations in India due to the fact that
racial range is not of significance inside the u . S ., and this practice is followed inside the
North Americas and the EU. This is Principle three.1 beneath the ICGN Corporate
Governance Principles.Whistleblowing policy
Tata Motors has a devised a standalone whistleblowing policy, which it is required to
devise as it is listed on the NASDAQ. However, this policy is applicable to the whole
organization in all its areas of operation, and is not limited to just the US. The company
has engaged third-party independent platforms such as EthicsPoint and Navex Global to
facilitate filing of complaints and grievances. This policy is also mentioned as Principle
4.2 under the ICGN Corporate Governance Principles.
4. Restriction on political lobbying
Principle four. of the ICGN Corporate Governance Principles mentions that companies
ought to restrict political lobbying sports. These sports should be regulated and
controlled, and a brief committee ought to be constituted whilst necessary to make sure
that benefits and risks of the technique taken are understood, monitored, transparent and
regularly reviewed through the board. Although this precept does no longer completely
limit political lobbying, as it's far understood that lobbying has sure blessings for the
increase of a enterprise and in a few circumstances can also even allow the enterprise to
survive. Tata Motors has formulated a Code of Conduct beneath which it particularly
mentions that the employer does now not have any interest in the outcome of elections
and might not take part to persuade political decisions in any manner.
 5. Integrated reporting
Principle Five of the ICGN Corporate Governance Principles mentions that organizations ought
to divulge their reviews (monetary etc.) in a layout that places historic overall performance into
attitude, and portrays the risks, possibilities and potentialities of the enterprise. All Reports of
Tata Motors follow this format in which they describe the previous FY’s file, then continue to
explain the current record. The reviews end with a observe at the destiny regulations of the
agency. Moreover, on the Tata Motors internet site, there may be a separate section of interactive
charts which may be used to get entry to a spread of statistics.

Suggestions
Even even though Tata Motors has formulated a comprehensive company governance policy this
is primarily based on very sturdy basics and aligns with the business enterprise’s imaginative and
prescient and project, there are positive emerging regions which might need to be mainly
targeted through the employer. The pandemic has uprooted the lives of many people across
diverse sectors, and the reality that car enterprise is one of the worst-hit isn't hidden. The
organisation can utilize its reserves in a way that the workers may be financially helped even
with none output. The corporate governance policy of the company can now divert more of the
corporation’s sources in the direction of reaching better health and safety standards in order that
it can be better organized for the future.
The corporation can also mainly devise a committee on assessing the sustainability of its
‘inexperienced programs’. The business enterprise has increased investments in electric powered
mobility by way of a enormous margin, which incorporates setting up of battery manufacturing
and charging stations. While in the long run these applications will extensively decrease carbon
footprint, there is a debate regarding the bad effects on the environment, specifically due to the
fact the batteries contain poisonous substances. A committee to cope with this specifically is
something the business enterprise should remember within the coming years.
Last however no longer the least, the business enterprise must continually formulate plans
preserving in mind the hobbies of its shareholders and the network and society at big, because
the enterprise has a duty now not most effective closer to its proprietors but to the sector as well.