Axis, Infosys, SBI top disclosure champions: FTI Consulting report

Among 22 Indian companies that scored over 90% in FTI Consulting study

Axis Bank, Infosys and State Bank of India topped the list of select Indian companies that have taken a progressive view of disclosure, taking it beyond a "legalistic definition". These companies topped a list prepared by global advisory firm FTI Consulting scoring " 10/ 10" on the weighted Composite Disclosure score. The composite disclosure score takes into account seven mandatory disclosure parameters and eight voluntary ones.

Superior disclosure practices are considered a proxy for superior management quality and better corporate governance, FTI said in the study, which was part of it's the India Disclosure Index report 2017.

The big three were part of 22 'Disclosure Champions' which scored higher than 9/ 10 " Two years back, such champions came from one or two sectors. This year, they come from four knowledge economy and three 'old economy' sectors. Each of these companies are setting an example on corporate disclosure for other companies in their respective sectors," Amrit Singh Deo, Managing Director in the Strategic Communications segment of FTI Consulting said in a statement.

The financial sector had the highest number of disclosure champions at six. Apart from the top two, IndusInd, YES Bank, Union Bank of India and Federal Bank made it to the list. Bharti Airtel, Bharti Infra and Mindtree came from the IT/Telecom space, while Lupin, Piramal and Biocon were the champions among pharma companies. Mahindra, Apollo and Supreme Industries topped the manufacturing list and Tata Steel, United Phosphorous and Vedanta were among the best disclosures in the metals and mining sector. HUL, Dishtv and JSW Energy were other companies with good disclosure scores among 200 companies analysed for this purpose.

According to the report, "Higher Voluntary Disclosure scores indicate Corporate India is taking a progressive view of disclosure, beyond a legalistic definition. However, one must bear in mind that 'disclosure standard' itself is a moving target and this report covers leading Indian companies only. Boards could articulate 'disclosure policies' anticipating new risks, regulatory developments and global best practices and better prepare their companies to attract 'transparency premiums' from investors."

While FTI predicted more companies to go for third party evaluation of board performance from the present six, the report found about 22 per cent of the top 100 companies by market capitalization had fallen short of even mandatory disclosures. Overall, the top 100 companies had a composite disclosure score of 6.8/10 and voluntary disclosure score of 5/8, suggesting there is room for improvement.

"I expect boards and independent directors will advocate for more corporate information to be shared proactively as board performance comes under greater scrutiny in India," Deo of FTI added.