Infosys chairman R Seshasayee on Saturday said he will complete the remaining part of his tenure and continue in his position till May 2018, putting to rest intense speculation that he would resign following corporate governance issues raised by company founder NR Naryana Murthy. Addressing the 36th Annual General Meeting of Infosys in Bengaluru, Seshasayee said, “During the remaining part of my tenure, I would be committed to further enhancing governance standards to improve shareholder value and to plan a smooth transition for my successor.” He will turn 70 next year.
Murthy had raised several corporate governance issues about Infosys, specifically with regard to compensation paid to the top leadership of the company — CEO Vishal Sikka and COO Pravin Rao. Besides, he had also raised questions on the severance package paid to former CFO Rajiv Bansal.
However, Seshasayee during the AGM said, “We in the Board earnestly believe that it is our duty to listen to every shareholder, introspect and further improve our performance or take corrective actions… The Board has continuously engaged with all major investors, in particular with the founders, and will continue to do so.”
Infosys also had to conduct an investigation by two external firms following an anonymous letter that levelled serious charges of financial impropriety in the acquisition of two companies and also on the compensation to Sikka. The findings of the two firms absolved the company of any wrongdoing. “Unfortunately, the allegations garnered disproportionate scrutiny and attention. These baseless mailicious and anonymous allegations have been draining and grossly unfair to the individuals,” the Infosys chairman said.
Seshasayee also noted the several challenges the company has been facing due to the transformation it has been undertaking over the last three years. This includes the shift from a traditional IT services company to an innovation-led, software-plus services company, the cultural transformation while inducting global leadership talent, and finally the abrupt transition from the promoter-led Board and management to an independent Board. “None of these is easy. Other players in the industry might have one or the other, but not all three,” he remarked. During the AGM, several shareholders questioned the barrage of criticism against the management and the Board of the company. They felt that company did not put out their best efforts in maintaining a cordial relationship with the founders.
The Infosys chairman felt that the IT industry is on the forefront of a fourth industrial revolution. “The rapid digitisation of everything around us is disrupting entire industries in an irreversible and profound way,” he said. Infosys CEO Vishal Sikka vowed to maintain consistent growth and profitability. Infosys, which crossed a revenue of $10 billion during FY17 under the leadership of Sikka, recording a growth rate of 7.4%, hopes to set new standards in the evolving world of technology. “Our endeavor is to be the next generation AI (artificial intelligence) company,” Sikka said, addressing the AGM.
Sikka felt that in the changed technology environment, Infosys is driven towards becoming a company from reactive problem solver to proactive problem finder. He also spoke about the need for a rapid change in Infosys which would evolve into software plus services company. Infosys is in the final stages of distributing Rs 13,000 crore or $2 billion to shareholders as part of its capital allocation strategy, which it had announced at the end of fourth quarter results of FY17, either through the way of dividend or share buyback.
The company also freed around 11,000 employees through its automation efforts and they are to redeployed in other functions. “We are in the process of finalising a distribution mechanism that complies with the applicable regulatory requirements in the best interest of all shareholders,” Seshasayee said.