Coforge has hired global executive search firm Egon Zehnder to identify two independent directors to replace recently departed chairman OP Bhatt and Nomination and Remuneration Committee (NRC) chair DK Singh. CEO and Executive Director Sudhir Singh reiterated that no other directors had been questioned over gaps in the board evaluation process and said the recent developments would not alter the company’s strategy or priorities.
The mid-tier IT services company sought to project a united front at an investor call on Monday, attended by five directors—Vivek Sharma, John Speight, Beth Boucher, Anil Chanana and Sudhir Singh—along with Chief Financial Officer Saurabh Goel.
“Our near term, medium term, and long term outlook remains unchanged and our FY27 guidance remains intact,” Goel reaffirmed. Coforge expects a consolidated Ebitda margin between 20.5-21% and consolidated Ebit margin of minimum 15.5% with a free cash flow conversion of above 100% of PAT in the current financial year. “The four-year guidance of around $5 billion revenue generated remains intact,” he added.
Vivek Sharma, appointed interim chairperson, said he had opted out of the race for the permanent position to ensure objectivity. Both internal and external candidates with “extraordinary capabilities” and deep professional expertise and governance experience would be considered, he said.
The seven-member board had sought explanations from Bhatt and DK Singh after they were found to have omitted Bhatt’s low performance rating from the Board Evaluation Report (BER). The issue came to light following an annual internal audit by KPMG Assurance and Consulting Services LLP, which found that the chairman and the NRC chair had not disclosed the details to the other board members. Bhatt resigned on September 8, followed by Singh two days later.
“All seven of us on the Coforge Board wish to state that the issues under consideration are not personal. All of us hold our two transition directors who are no longer on the Board in high regard, and we wish them the very best,” Singh said in his opening remarks.
Following DK Singh’s departure, Coforge has reconstituted its NRC and Stakeholders’ Relationship Committee. Beth Boucher, the longest-serving independent director on the board, has been appointed the new NRC chair.
Anil Chanana, independent director and chair of the audit committee, said the board had decided to widen the scope of its governance audit to cover the “completeness, accuracy and consistency” of matters reported to the board and its committees.
The expanded review will cover regulatory, financial, strategic, risk, ESG, CSR, investor grievances, whistleblower and internal-control matters. Chanana said the auditor typically selects a few meetings to observe, including the board evaluation process.
“Given the sensitivity and seriousness of the matter, we sought an explanation from the concerned directors,” he noted. “The members of the Board acted in their fiduciary capacity. The Board is committed to ensuring the highest standards of corporate governance.”
The Board members also allayed concerns around any internal conflict in policy or direction saying that healthy and constructive debates were a part of the role. Singh explicitly stated that the $2.35 billion Encora acquisition was also a unanimous decision made by the Board. “Given that all these meetings are on video, we have evidence that while we had robust discussions, there wasn’t a note of dissent by an individual director on it,” he said.
Echoing the company’s forecast, Singh also stated that Coforge was on track to sign a record number of large deals in the second-quarter of FY27. “We had said that we might end up signing as many large deals in the current quarter as we had signed in the full year just two to three years back, and we’re close to meeting that ambition,” he said.