Loose Ends at Infosys

Moneylife Digital Team 21 September 2017

Economy & Nation

Now that R Seshasayee and the two foreign directors on the Infosys board have hit back at NR Narayana Murthy (NRN), we have a few new questions. Mr Seshasayee has called NRN vindictive, slanderous and, effectively, a liar. NRN has not responded. What does it say about the much-admired NRN’s judgement about people? Remember, both, Vishal Sikka and Mr Seshasayee, were hand-picked by him as was Ravi Venkatesan, who was inducted as the vice-chairman after problems with the board began (but Mr Venkatesan seems to have gone along with the board’s formal letter, blaming NRN for Vishal Sikka’s exit). It is fairly certain that the two foreign directors, Jeffery Lehman and John Etchemendy, were inducted to the board with Mr Murthy’s consent. What is forgotten by most is that Infosys has made many mistakes with its board. These controversial directors were persuaded to make a quiet exit. I remember, the dean of a global business school telling me that decisions in Infosys were influenced by the expression on NRN’s face. If he appeared to be positive, the independent directors would vociferously support the decision, or do the opposite. Incidentally, many corporate watchers have noticed that two former independent directors, with a long stint on the board during Mr Murthy’s active leadership, had been the strongest voices asking him to back-off and leave Mr Sikka alone. Neither of them raised the issue of hefty compensation and huge exit packages which were so contrary to the Infosys culture. On the other hand, hundreds of former employees came out to back the chairman. Does this mean that Infosys employees imbibed the organisation’s culture far better than its board?

Media reports now tell us that a corporate governance committee, headed by Uday Kotak, will recommend rules on what information the company’s management and board of directors can share with founders and what they cannot. This probably covers situations like Rupa Kudva (former chief of CRISIL) allegedly asking NRN to sign a non-disclosure agreement to get access to an Infosys investigation into severance pay and other issues. It would make more sense if the Kotak committee asks such reports to be made public. It is good that NRN is happy with the return of Nandan Nilekani as vice-chairman; but it will be a travesty if the ‘full investigation’ report is buried just because one of the founders is back at the helm. In fact, NRN’s own credibility lies in ensuring this, especially in the face of Mr Seshasayee’s allegations.

Comments

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KRISHNAN SUBRAMANIAN

9 years ago

It is important to note that none of the independent directors objected to the severance package offered to the CFO .It is certain that all of them knew of the objections of the cfo to the Panaya deal.That much was admitted by Mr.Sikka also in public.It is true that valuations are subjective but even then a special severance package should have invited objections from the independent directors.That clearly shows independent directors contribute scantily to corporate governance.

Bikash Kumar

9 years ago

nothing beat common sense even phd from stanford . seldom the time has witness that personal charisma actually overweigh the business cycle and turned the IT has story of the past. such success are also accidental and being right place at right time. I hope neither mr. Murthy can repeat his success. therefor if it has to end it has to end badly. o matter how beautiful it was. I see common sense is always greater than artificial intelligence. The money is always like this....baap bada na bhaiya .....sabse bada ruppaiya.

sohan modak

9 years ago

Infosys scenario has become a mush like Bengali khichadi !

shyamdave.d

9 years ago

NRN overeached his ambitions and at times thought he was INFOSYS and INFOSYS was NRN. There is no doubt that his contributions to the Indian software industry were stellar. Of course he is self opinionated and clever as a fox as they say but he forgets even God rested on Sunday. He is currently treading the border line where he could do irretrievable damage to his company, no not his company but INFOSYS. Read my book "Age of Aspiration" for the seeding of the Indian software industry.