According to news reports, NIIT, has embarked on a novel concept of corporate governance by creating a 'global board of directors' by locating directors in each geographical area.
NIIT commenced operations in 1981, as an IT training company to become the ninth largest computer training institute in the world (in terms of revenues). It is India's leading IT trainer with 45% market share, training approximately 100,000 students every year.
By locating its directors in key geographical areas, NIIT will be able to concentrate on its clients in general, with added focus on key clients.
As on FY98
Two of its full-time directors already operate from abroad with chief executive officer (CEO) Vijay Thadani functioning from the US and another director Gopal Chakravarthy handling European operations from London. Another reason why key management personnel have relocated abroad, is to reduce the risks associated with overseas acquisitions, particularly in the US.
NIIT's concept of global governance makes a lot of sense given the fact that it derives close to 50% of its revenues from overseas operations. If the concept proves to be a success, more Indian software companies, given their large exposure to global markets, could be seen adopting global governance in one way or the other.
Analysts have mixed feelings about the company. A section opine that the company's valuations are too high, and have recommended a 'Hold'. Another section are of the view that given the company's potential, its valuations could get better and have flagged it as a 'Long term BUY'.
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