Coforge Ltd has disclosed governance concerns identified during an ongoing internal audit of its FY26 Board evaluation process. The review found restricted access to evaluation reports, incomplete presentation of findings and non-disclosure of the Chairman category’s lowest rating to the NRC and Board. Coforge said these matters are separate from financial reporting and do not affect its business or growth outlook, but shareholders now have a clear governance issue to monitor.
Coforge flags governance gaps in Board evaluation process
The internal audit found that Board evaluation reports were restricted to the NRC Chair and Chairman of the Board.
The review also found that the Chairman category received the lowest rating, but this was not disclosed or discussed before the NRC or Board.
Reader Takeaway: Business decisions remained unanimous, but the ongoing review raises questions over Board transparency and oversight.
What just happened
Coforge Ltd disclosed findings from an internal audit examining the accuracy and completeness of Board reporting linked to its FY2025-26 Board evaluation process.
The review was conducted during Q2 FY27 and remains ongoing. According to the disclosure, access to the underlying Board evaluation reports was limited to the Nomination and Remuneration Committee Chair and the Chairman of the Board.
Other Board members, including independent directors, did not receive the reports because of instructions from the Chairman.
The auditor also observed that findings were presented to the NRC and Board without circulating copies of the underlying reports. The presentation did not cover all relevant aspects identified in the evaluation.
A more sensitive finding concerned the Chairman category. The disclosure states that this category had received the lowest rating in the evaluation reports, but that result was not disclosed or discussed before the NRC or the full Board by the NRC Chair and Chairman.
Why this matters
Board evaluation is intended to give directors visibility into how effectively the Board, its committees and individual members are functioning. Restrictions on access to the underlying evaluation material can limit the ability of directors, particularly independent directors, to assess governance issues themselves.
For investors, the immediate concern is governance rather than earnings. The company has explicitly separated the Board evaluation process from financial reporting, accounting policies, revenue and profitability.
Company’s position
Coforge said the Board has continued to work closely and has unanimously approved major strategic decisions.
These included the divestment of AdvantageGo, the exit from the data centre business, the acquisition of Encora, execution of the Sabre contract and the decision to exit the loss-making India Government business.
The company said the Board evaluation observations have no bearing on its business performance or growth outlook.
Risks to watch
The internal audit remains incomplete, making its final conclusions important for shareholders. Investors should watch whether the company identifies additional governance deficiencies, changes how Board evaluation reports are circulated or introduces corrective controls around access and disclosure.
The role of independent directors is another key point. Greater visibility into evaluation findings would allow them to independently assess leadership and governance performance rather than rely only on summary presentations.
What to track next
The next material development will be completion of the internal audit and any subsequent disclosure on corrective measures.
Shareholders should focus on whether Coforge changes its Board evaluation process, expands access to reports, strengthens NRC reporting and formally addresses the observations identified in the review.