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Dr Reddy's Laboratories Limited

Q. What is the broad philosophy that guides the board?

A. The board has multiple roles. The popular notion of governance, of course, is one of the most important aspects of a board's role but beyond governance, the board has other roles too. It is the ultimate policy setting body, and also sets the tone for what the company stands for and how employees behave. In our case, the board is deeply engaged in building a great company. They play a very active role in highlighting areas to focus on for the organization, understanding what the context of the company is and help shape the strategic agenda of the company.

Q. How do you maintain this level of engagement?

A. Having a board is one, creating the enabling conditions for them to be fully engaged is another, and thirdly, creating enough structure and forums for them to shape the organization are three important things that have helped us.

Q. How do you create a framework for best practices at the board level and more importantly, how do you ensure participation from all stakeholders, including employees, shareholders, etc.?

A.We don't follow any best practices blindly. We look at all governance practices and adhere to them. Beyond that, we also try to leverage our board in many ways – for the growth of the company. We use their counsel and this helps in the evolution of the company. In terms of disclosures to the board; in terms of processes, we are compliant. The board also has access to all top-tier managers, they can independently
pick up the phone and talk to anyone. As a part of these processes, each committee has an anchor in management. We also organize informal dinners for the senior management to interact with the board.

Q. What are your views on the proposed Companies Bill, which talks about no stocks for non-executive directors and a cut in tenure for independent directors?

A. I don't think working for a fixed period of time makes a director less independent or otherwise. I also don't understand the logic of not giving stock. It doesn't make a difference. Great board members don't come for money. They come because they want to make a contribution.

G.V. Prasad

Vice Chairman and CEO

Dr. Reddy's Lab (DRL) has one of the most well-structured and disciplined boards, in respect to following governance procedures diligently which in turn helps the board make a true value-add to the shareholders.

DRL has well-constituted board with diverse yet relevant skill sets. It is one of the few boards in India where each member has a formally defined responsibility at the board and committee level for which he/she is responsible and answerable to the company.

The board evaluates its own performance periodically involving independent external consultants.

Apart from the board process, the company also demonstrated high shareholder value creation with front running total shareholder return and return on capital.