Analyst perception survey details corporate governance trends across the region
Companies in India rank among the best in the Asia Pacific region for corporate transparency, trust, and access to top executives, according to new research released today by Institutional Investor. In particular, banks in India are seeing their CEOs, IROs and CFOs emerging as some of the top ranked, reflecting a commitment to accountability at the top, as well as increasing shareholder value.
In India, the Most Honored Companies in Institutional Investor’s All-Asia Executive Team rankings 2016 are:
- Motherson Sumi Systems (Autos & Auto Parts)
- Maruti Suzuki India (Autos & Auto Parts)
- HDFC Bank (Banks)
- Indusind Bank (Banks)
- Kotak Mahindra Bank (Banks)
- Sun Pharmaceutical Industries (Health Care & Pharmaceuticals)
- Lupin (Health Care & Pharmaceuticals)
- Cummins India (Industrials)
- Larsen & Toubro (Industrials)
- Infosys (Technology/IT Services & Software)
- Tata Consultancy Services (Technology/IT Services & Software)
- MindTree (Technology/IT Services & Software)
The 2016 All-Asia Executive Team survey reflects the opinions of 1,394 investment professionals at 582 financial institutions. Respondents from the buy side work at firms that collectively manage an estimated $963 billion in Asia ex-Japan equities. The in-depth research is the only annual survey reflecting feedback from both buy- and sell-side analysts, with an unparalleled level of detail on the IR efforts of companies across the region.
“With continued questions over the global economic outlook post both China slow down fears and Brexit, now is the time for companies to effectively engage investors and stakeholders around the world to tell their story and secure investment dollars,” said Will Rowlands-Rees, managing director of research at Institutional Investor. “India is emerging as a strong regional leader in these areas, with many companies across sectors doing an exceptional job of engaging the both the Asian and global investment community.”
In four sectors, companies from India were ranked No. 1 in the region. These companies are:
- HDFC Bank, whose top-ranked executives, Investor Relations practices, and Analyst Days secured the top banking slot;
- Noida-based Motherson Sumi Systems led the Auto & Auto Parts sector, where 5 of 7 of the top ranked companies are based in India;
- Mumbai’s Sun Pharmaceutical Industries achieved first place in the Health Care & Pharmaceuticals sector.
- Infosys, who led its peers to achieve the top ranking in the Technology/IT Services & Software sector in which all four top ranked companies are from India.
One interesting finding in the Instututional Investor research is that CEOs are using technology to bolster their presence in underserved segments of Asian markets. For example, HDFC’s Aditya Puri, the top-ranked CEO in the Banks category, says his Mumbai-based firm has been developing digital solutions to provide financial services to the 750 million people who live outside India’s cities.
There’s a major logistical problem in semi-urban and rural India in getting from one place to the other, being able to access the right prices, being able to have the information, having the totality of products,” Puri tells II. “Most of our products are now available on a feature phone, so a customer doesn’t have to hop onto a bus or a motorbike or whatever and go from his village to the town where the branch is. He can get his balance. He can know whether his check is honored or not. He can apply for a loan.”
Another key trend emerging in the findings is that hedge funds have a newfound interest in the investor relations work of Asian companies. Participation by hedge funds in the survey is up three points over last year to 29 percent. This growth in smaller asset manager participation is closing the gap with the U.S., where hedge fund respondents comprise 43 percent of the respondents in the same survey.
Each year, II asks portfolio managers and sell-side analysts to name the best CEOs, CFOs and investor relations professionals at the Asia (ex-Japan) companies they cover, and to evaluate these businesses on several corporate governance attributes, including making board members and senior executives accessible, providing timely and accurate disclosure of essential financial information. Voting is unprompted and confidential, and rankings in each of the four categories — Best CEO, Best CFO, Best IR Professional and Best IR Company — are based on combined buy- and sell-side votes.