Corporate Governance of Oil & Natural Gas

Corporation Limited (ONGC)

Corporate Governance Model in a Public Sector
Undertaking


Section B Group 10

1. Bitan Banerjee
2. Prakhar Maheshwari
3. Prasoon Agarwal
4. Rajnish
5. Saptorshi Bagchi
6. Satyajeet
7. Shiladityo Bhattacharya
8. Utsav Banerjee
Corporate Governance of Oil & Natural Gas Corporation Limited (ONGC)

ONGC is an Indian multinational oil and natural gas company. It has its headquarters
in Dehradun, India. It is one of the largest company of its kind in Asia, which
produces approximately 72% of Indias crude oil and 48% of its natural gas. ONGC
has taken structured initiatives towards Corporate Governance and its practices
which evolve around multi-layered checks and balances to ensure transparency.
Apart from the mandatory measures required to be implemented as a part of
Corporate Governance, ONGC has gone the extra mile in this regard and has
implemented the Whistle Blower Policy, Annual Report on working of the Audit &
Ethics Committee, MCA Voluntary Guidelines on Corporate Governance, Enterprise-
wide Risk Management (ERM) framework.

The premise of Corporate Governance framework in ONGC:

Adherence to ethical standards for effective management and distribution of wealth
and discharge of social responsibility for sustainable development of all stakeholders
including customers, employees and society at large.

A sound system of internal control to mitigate the risks to achievement of business
objectives both short term and long term.

Compliance of laws, rules & regulations in true letter and spirit.

Independent verification of the Company's financial reporting.

Strategic supervision by the Board of Directors of appropriate composition, size,
varied experience and commitment to discharge their responsibilities.

Timely and balanced disclosure of all material information to all the stakeholders.

A clear delineation of shareholders' rights.

Accuracy and transparency in disclosures regarding operations, performance, risk
and financial position.

The Board of Directors

The Company is managed by the Board of Directors, which formulates strategies,
policies and reviews its performance periodically. The Chairman & Managing
Director (CMD) and Six Whole-Time Directors), manage the business of the
Company under the overall supervision, control and guidance of the Board.

The Board of Directors has an adequate combination of Executive (Functional) and
Non-executive Directors. As on 31st March, 2012, the Board of Directors had 13
members, comprising of 5 Functional Directors and 8 Non-executive Directors
nominated by the Government of India. To share the global experience and business
strategies, Managing Director, ONGC Videsh Limited (OVL) is a permanent invitee to
the meetings of the Board.



Table I: Attendance of Board of Directors (Ref: ONGC Annual Report)
It should be kept in mind:

(i) The Company being a PSU, all Directors are appointed/ nominated by the
President of India;

(ii) Directors do not have any pecuniary relationships or transactions with the
Company;

(iii) None of the Director is a Member of more than 10 Committees or Chairman of
more than 5 Committees, across all the companies in which he is a Director.

The company also has the following Board Committees:

Audit & Ethics Committee
Remuneration Committee
Shareholders'/ Investors' Grievance Committee
Human Resource Management Committee
Project Appraisal Committee
Health Safety & Environment (HSE) and Sustainable Development Committee
Financial Management Committee
Committee on Dispute Resolution
Other Functional Committees

In conclusion it may be mentioned that many organisations have recognised the
excellence in Corporate Governance in ONGC and the following accolades have
been conferred on ONGC in recent years:

(i). 'ICSI National Award for Excellence in Corporate Governance for 2011'-
Certificate of Recognition by the Institute of Company Secretaries of India.

(ii). 'ICSI National Award for Excellence in Corporate Governance-2010'- by the
Institute of Company Secretaries of India;

(iii). 'Golden Peacock Global Award' for Corporate Governance by World Council for
Corporate Governance, U.K. in the years 2005, 2007,2008 and 2009

(iv). 'Golden Peacock Award' for Excellence in Corporate Social Responsibility in
Emerging Economics 2006 by World Council for Corporate Governance, U.K in 2006