Chapter - 3

MANAGEMENT AND LEADERSHIP.

1.Company leadership team.

Name Position Qualification

Board of directors

Mr. Rajiv Anand Deputy Managing Director Commerce graduate and CA

Ms. Meena Ganesh Independent Director PGDM and Bsc in Physics

Mr. Gopalaraman Independent Director MBA and Graduate in BA

Padmanabhan

Mr. Girish Paranjpe Independent Director Commerce graduate

Mr. S S Mallikarjuna rao Independent Director Bachelor degree in science

and general laws

Prof. S Mahendra Dev Independent Director Ph.D. Economics

Mrs. Ketaki Bhagwati Independent Director Bachelor of Arts and Master

of Public Administration

Mr. Manoj Kohli Independent Director Degrees in Law, Commerce

and MBA

Mr .P N Prasad Independent Director Master’s degree in science

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Mr. Amitabh Chaudhry Managing Director & CEO Engineering degree and
Graduate in Business Mang.

Mr. Ashish Kotecha Non-Exe . & Nominee Director MBA and Master of
Commerce

Mr .T C Susheel Kumar Non-Exe . & Nominee Director M A in Economics

Mr .Rakesh Makhija Part Time Chairman & Chemical Engineer

Independent Director

Key executives

Mr. Prashant Joshi Chief Credit Officer Civil Engineer

Mr. Puneet Sharma Chief Financial Officer Bachelor of Commerce

Mr. Sandeep Poddar Co. Secretary & Comp Officer Bachelor of Laws

Mr. Sangram Singh President MBA and Graduate in BA

Mr. Sanjeev Moghe President PhD. in Business

Administration and Mang

Mr. Sanjay Silas President Engineering degree and

Graduate in Business Mang.

Mr. Avinash Raghavendra President Master’s in Information Tech.

Mr. N Balaji President Bachelor’s degree in ECE

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Mr. Anil Agarwal President Management studies.

Mr. Vivek Gupta President MBA and Bachelor of Tech.

Mr. Bimal Bhattacharyya President Graduate from ICAI

Mr. Amit Talgeri President Graduate in Mathematics

Physics and Management

Mr. Reynold Dsouza President Bachelor’ s Arts- Sociology

Mr. Rajkamal Vempati President - HR Doctorate degree

2.Corporate governance and corporate social responsibility.

Accountability, transparency and equality of treatment for all our stakeholders are the central
tenets behind Axis Bank’s corporate governance philosophy. We continually undertake
measures to adopt best practices in corporate governance.
Board of Directors:
The composition of the Board of Directors of the Bank is governed by the relevant provisions
of the Companies Act, 2013, the Rules made thereunder, the Banking Regulation Act, 1949,
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (Listing Regulations) and the Articles of Association of the Bank. Our
Board has an optimum combination of executive and non-executive Directors. The Board
presently* comprises of 13 Directors and provides a diverse combination of professionalism,
knowledge, expertise and experience as required in the banking business. The Board has 8
Independent Directors constituting more than half of its total membership strength, and 3
women Directors. None of the Directors or their relatives are related to each other. We
recognise and embrace the importance of a diverse Board in our success and are endowed
with the appropriate balance of skills, experience and diversity of perspectives, thereby
ensuring effective governance. The Board has adopted the Policy on Board Diversity which
lays out an approach to ensure Board diversity so as to enhance its effectiveness while
discharging its fiduciary obligations towards its stakeholders.

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Selection and Appointment of Directors :
The Nomination and Remuneration Committee of the Board, comprising entirely of
Independent Directors, reviews the structure, size, composition of the Board, the regional and
industry experience, track record, expertise, diversity of the Board, their positive attributes
for evaluation of existing skills, defining gaps and the information and documents provided
by the candidates and makes appropriate recommendations to the Board with regard to their
appointment, re-appointment, remuneration and assignment of duties (nomination to various
committees of the Board) designed to enhance the Board's effectiveness. We adhere to the
process and methodology prescribed by the Reserve Bank of India in respect of the ‘Fit and
Proper’ criteria as applicable to Private Sector Banks, and the signing of deed of covenants
which binds the Directors to discharge their responsibilities to the best of their abilities,
individually and collectively, in order to be eligible to be appointed as Director of a Bank.
Evaluation of the Board’s Performance:
The Board has adopted a formal mechanism for evaluating the performance of its
Committees, Independent Directors and Non-Independent Directors including the Chairman
of the Board. The evaluation was conducted on the various aspects of the Board’s functioning
such as Strategic alignment and direction, Engagement alignment, Composition & Structure,
Dynamics & Culture, Ethics & Corporate Citizenship, Board support, Audit Committee of the
Board, Risk Management Committee, Nomination & Remuneration Committee, and Self-
evaluation and attendance. An external agency was engaged for setting the methodology and
determining the process of evaluation and advising the Board on the measures pursuant to the
outcome of such an evaluation.
Remuneration Policy and Remuneration of Directors:
AXIS Bank compensation philosophy aims to attract, retain and motivate professionals in
order to attain our strategic objectives and develop a strong performance culture in the
competitive environment in which we operate. To achieve this, we follow the principles of
competitiveness in the talent market, pay for the job through fixed pay, pay for performance
to drive meritocracy through variable pay, employee stock options for long-term value
creation and aligning the benefits and perquisites with market practices and affordability. The
compensation structure for the MD & CEO, Whole-Time Directors (WTDs) and employees
at the level of Vice President and above in Risk Control and Compliance functions of the
Bank, is aligned to the Reserve Bank of India’s (RBI) guidelines for sound compensation
practices.
Sustainability Governance :
The Management Committee of the Bank is responsible to review the implementation of the
Sustainability Framework of the Bank. The Executive Director (Corporate Centre) of the
Bank oversees the implementation of the Sustainability Framework of the Bank and is
supported by the Ethics & Sustainability Department. The Sustainability Framework is
cascaded down from the top management to individual departments, in order to implement
various initiatives. The various elements of the Sustainability Framework are also reviewed
by the Board and its

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The AXIS Bank recognizes the importance of good corporate governance and corporate
social responsibility in promoting and strengthening the trust of its shareholders and other
stakeholders.

The CSR Policy shall be guided by the Bank’s corporate vision and the aspiration to be the
Bank of Choice for Customers, Shareholders, Employees and Community.

The Bank’s CSR Policy has been framed in accordance with Section 135 of the Companies
Act 2013 and the Rules framed thereunder. The Policy shall apply to all CSR
programs/activities undertaken/sponsored by the Bank or executed through Axis Bank
Foundation or through any other Trust/Society or implementation partner or any other fund
set up by the Government.

CSR Purpose Statement

The primary purpose of the Bank’s CSR philosophy is to make a meaningful and
measurable impact in the lives of economically, physically and socially challenged
communities of the country through an integrated approach of development which focuses
on creating sustainable livelihood, promoting education and skills development, creating
awareness amongst public at large on public interest topics including financial literacy,
facilitating and providing access to formal banking channels for excluded sections,
promoting environmental sustainability, and supporting health and sanitation initiatives.

CSR Focus Areas

The Bank will support programs and activities in the following areas. The broad program
areas under CSR focus areas are given in the Annexure to this Policy.

 To contribute to poverty alleviation and to reduce inequalities faced by socially and

economically backward sections of society through an integrated approach of
interventions in the areas of sustainable livelihood generation and support, women
empowerment, financial literacy, safe banking and access to formal banking
channels, health, sanitation and hygiene and public awareness on various pertinent
social and environmental topics like road and personal safety and environmental
sustainability.

 To promote environmental sustainability and ecological balance through

sustainable livelihood initiatives focused on natural resource conservation and
management, renewable energy and energy efficiency projects, afforestation and
plantation programs, and awareness programs.

 To promote entrepreneurial culture through skills and capacity development

programs aimed to support the growth of MSME sector, and through initiatives
aimed to foster innovation by engaging with start-ups, students and technological
incubators in academic institutions.

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  To promote education and skills development through initiatives on vocational and
livelihood enhancing skills development programs, and programs aimed to nurture
the talent of children and students in various fields.

 To support welfare programs for armed forces veterans, war widows and their
dependent children.

 To support victims of natural calamities and other disasters through relief and
rehabilitation programs.

CSR Budget

 The CSR Committee will abide by the provisions relating to annual expenditure on
CSR activities as laid down in Section 135 of the Companies Act, 2013 read with
Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended from
time to time.

 The surplus arising out of the CSR projects or programs or activities shall not form
part of the business profit of the Bank.

Validity of CSR Policy

The Committee may amend the CSR Policy as may be required from time to time and will
be reviewed annually.

Execution of CSR

All CSR programs/activities will be executed by the Bank itself or through Axis Bank
Foundation or through any other Trust or agencies and entities as it deems suitable. The
Bank may also make contributions to any fund set up by the Government.
CSR Governance Structure

1. Roles and Responsibilities

The Board of Directors of the Bank will be responsible for:

 Approval of the CSR Policy of the Bank.

 Disclosure of the Policy in its report and placing the same on the Bank’s website as
prescribed under Section 135 of the Companies Act, 2013.

 Ensuring that it specifies the reasons in its report for not spending the earmarked
amount in case the Bank does not spend such amount during the financial year.

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  Making any change(s) in the constitution of the CSR Committee as deemed
suitable.

2. Monitoring and Reporting Framework

The Bank will institute a well-defined monitoring and evaluation mechanism to ensure
that each CSR project has:

 Objectives developed out of societal needs.

 Targets, time lines and measurable parameters wherever possible.
 A progress monitoring and reporting framework aligned to the requirements of
Section 135 of the Companies Act, 2013 and the Rules framed thereunder.

3. Reporting Framework

 The progress of CSR projects and expenditure will be reviewed by the CSR
Committee.

 The Bank will report on CSR performance in its annual report as per the structure
and format prescribed in the notified Corporate Social Responsibility Policy Rules.

4. Others

The Bank’s CSR Committee may choose to select program areas which are included
under Schedule VII of the Companies Act, 2013 in addition to those specified in the CSR
Policy in the course of fulfilment of the Bank’s CSR objectives as decided by the CSR
Committee from time to time

ANNEXURE: CSR Program Areas

An illustrative list of various programs and activities to be supported under the Bank’s
CSR focus areas is given below:

1. Poverty alleviation and measures to reduce inequalities

 Sustainable Livelihoods: Creating sustainable livelihoods is an overarching theme

that is pursued to contribute to poverty alleviation and integrated development,
especially in some of the poorest districts of the country. The Bank also endeavours
to promote women empowerment through such activities by providing them skills
and livelihood assets which contribute to improvement in their socio-economic
status.

 Financial literacy and inclusion: The Bank will promote the cause of Financial
Literacy & Inclusion to reduce inequalities faced by socially and economically
backward sections of society. These may be undertaken singly and/or in conjunction
with the Government initiatives and schemes. The Bank will create awareness on
personal financial management aspects through financial literacy initiatives and

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 provide the underserved sections of society – especially rural population, urban poor
and migrant workers – with access to formal banking channels and products under
financial inclusion initiatives. The Bank may also facilitate the access to Government
benefit schemes and social security schemes through banking channels.

 Access to finance and entrepreneurship development: Support creation of

sustainable income sources through micro-finance and micro-enterprise development
and strengthen mechanisms for alternative livelihood.

2. Education and Skills Development

 Skill development through vocational education and training: Provide skilling, re-
skilling and multi-skilling support to youth including the differently-abled, for gainful
employment. The skilling programs may also include life skills coaching and career
counseling support.

 Consumer education and public awareness: Promote financial education and

awareness amongst consumers at large and school children. Disseminate knowledge
on managing finances etc. to consumers at large which may include aspects of safe
banking practices, tax planning, saving and investing and other relevant financial
knowledge. Undertake public awareness initiatives on public interest topics such as
road and personal safety, environmental sustainability, health, sanitation & hygiene
etc.

 Skills and talent program for children and students: Undertake programs that hone
the skills and talent of children and students through talent competitions, scholarships
and learning programs.

 Entrepreneurial Skills Development: Engage with start-ups, students and

technology incubators in academic institutions to promote innovation and
entrepreneurial skills.

3. Environmental Sustainability and Rural Development

 Natural resource management, soil and water conservation: Management of

natural resources leading to more productive outcome for agriculture and associated
livelihood. Support rural and village communities through non-farm based
livelihood development.

 Renewable energy and emissions reduction: Ensure environmental sustainability,

and ecological balance through pursuance of projects that conserve resources and
enhance environment such as renewable energy and emissions reduction projects.
Create carbon sinks through afforestation and plantation programs.

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 4. Sanitation & Healthcare

 Sanitation and drinking water: Work towards improving/providing sanitation and

drinking water facilities for communities/schools and create awareness on health and
hygiene topics to bring about a behavioural change.
 Healthcare: Support preventive and curative healthcare initiative including
conducting health screening and awareness camps.

5. MSME Sector Growth: Provide support to MSME sector .

6. Humanitarian Relief: Support relief measures during natural and other calamities
which may include contribution to Prime Minister’s National Relief Fund or any
other such prescribed funds.

7. Armed Forces Veterans: Support measures for the benefit of armed forces veterans,
war widows and their dependents, widows of armed forces injured in action.

8. Capacity Building of Personnel and NGO Partners: Build the capabilities of the
Bank’s own personnel as well as that of executing and implementing agencies
through training, conferences and experience sharing programmes.

DECISION MAKING PROCESS

At the heart of any governance arrangement is the design of decision-making structures.

Human factors will always remain important to outcomes, but human behaviour is subject
to influence by structural and procedural aspects of the environment.
1.Decision-making by an individual or a group?
AXIS banks simply implemented the government’s policy instructions, the preferred
arrangement might be to have a single chief executive responsible for running the
institution – the model for government departments. Attractive though the clarity of such an
arrangement might be, central banks have become increasingly characterised by group
decision-making, especially in relation to monetary policy. As more decision-making
authority has been delegated to the central bank, group decision making has become more
common. Group decision-making is thought to lead to better, more accurate decisions – an
idea that has both theoretical and empirical support.
2.Legal framework for decision-making :

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In many countries, the legal statute of the AXIS bank specifies the decision-making body or
bodies of the institution, how these bodies are constituted, and what they are responsible
for. The types of decisions that the central bank makes fall broadly into three categories.
These categories, and the names of the boards in charge of them as used in this chapter, are
as follows:
 Policy formulation and implementation
 Management and administration
 Oversight of the institution’s performance
3. Many roles … how many boards?
AXIS banks have a singular (―main‖ or ―principal‖) board discharging several functions;
others have several boards, each with a separate function. The issues involved in designing
the particular arrangement include the impact on efficiency of decision-making, the
management of potential conflicts amongst objectives, the effectiveness of accountability
and the availability of suitable personnel. This section discusses the ways in which these
issues are typically addressed by central banks.
4. Supervisory boards:
A little under two thirds of BIS member AXIS banks have boards that the central banks
themselves identify as having significant supervisory responsibilities (Table 8). 83 About
half of BIS member central banks have at least one board whose prime purpose is to
supervise the central bank in whole or part .One of the main functions of supervisory
boards is to hold management to account on behalf of the principals. In the corporate world,
a supervisory board acts for shareholders whose ownership rights may be widely spread,
reducing the ability and incentive of each principal to contract with and monitor
management. In the central banking world, the motivation for a supervisory board may be
different. Because the legislature or the government are themselves agents for the principals
(the wider public, including future generations), monitoring need not be delegated in order
to overcome dispersion and associated free rider problems.
5. Policy boards :
Boards or committees for decision-making on interest rates are now very prevalent and
have become the focus of a mushrooming field of research.86 In only a handful of countries
is the governor still legally and practically responsible for interest rate decisions (Aruba,
Israel, Madagascar, Malta, New Zealand and Papua New Guinea). In some other cases, the
governor remains legally responsible, but decisions are made within the context of

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committee meetings that entail a vote or consensus forming (Canada, India, Malaysia,
South Africa). In almost all cases, the board that makes interest rate decisions is also
responsible for other functions, including decisions in relation to other policy functions and
on the management of the bank. There is only a small (but growing) number of dedicated
monetary policy boards
6. Individual or collective responsibility:
Voting or consensus with group decision-making, a choice needs to be made between
individualistic or collective decision-making protocols. Few central banks release vote
counts or the voting record. If minutes are released within a short time of the decision
having been made, attribution of views is rare. 87 Collective decisions – whether
determined by private voting or consensus – are strongly favoured
7. External board members:
When to include, what roles to assign Decision-making groups made up of experts
commonly face two problems: a tendency to ―group think‖, especially when the world is
uncertain; and an attraction to technocratic solutions for human problems. Bringing
outsiders into the group may counterbalance those tendencies. The essential contribution of
outsiders is diversity of life experience and of day-to-day contacts. With that greater
diversity of background, they may ameliorate the expert group’s problem tendencies. Also,
the democratic legitimacy of the decision-making group, which is particularly important in
some jurisdictions, can be enhanced by members from a larger cross-section of society.
8. Board size
The median board size in central banks is in the range of seven to nine members; a little
smaller for boards with management functions and a little larger for boards with advisory
functions. Much has been written on the subject of the optimal size of groups that make
decisions. The literature tends to see an optimal size for monetary policy committees in the
range of five to nine members, but central banks and other institutions proffer numerous
examples of both smaller and larger boards working successfully. The Swiss National Bank,
for example, has a three-member board, while the Federal Reserve System’s Federal Open
Market Committee numbers 19 (although only 12 have a vote at any one time) and the
ECB’s Governing Council numbers 22 (at present). The Federal Reserve and ECB
examples point to the influence of regional makeup and country size on board size – boards
are large in these federal and multistate examples to ensure representation.
9. Committee dynamics

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A large literature in social psychology considers the effect on group dynamics of factors
such as decision procedure, the presence and backgrounds of external members and the
extent of public disclosure of proceedings. The literature suggests, for example, that the
beneficial averaging of views that occurs when people come together may be offset by a
tendency for individual views to become more extreme if they are shared by the majority or
by others with big reputations.90 The less diverse the group’s views are, the greater the risk
of polarisation. A second example from the literature concerns the effect of group size on
group dynamics.

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