The Board of directors at Infosys is likely to see a restructuring in the coming weeks, sources said, even as the friction between founder NR Narayana Murthy and board chairman R Seshasayee continues to fester beneath the surface.
The Board of directors at Infosys is likely to see a restructuring in the coming weeks, sources said, even as the friction between founder NR Narayana Murthy and board chairman R Seshasayee continues to fester beneath the surface. Murthy has said he will respond to allegations by the board at the right time, and sources believe he may even opt for legal action. Sources close to the Murthy camp has said comments made by the board last Friday has harmed the reputation of the founders. “The comments were disparaging and legal options may be considered,” a source said. This could precipitate the exit of some of the directors. According to sources, barring a few members on the board, the position of others could become untenable in the near future. Over the past few months, Murthy has been critical about the functioning of the board, while questioning the corporate governance practices at Infosys. He has been quite vocal about reconstituting the board, which he felt was required to set matters right at the company he founded.
The founders hold a 12.75% stake in the company. Though the current chairman, Seshasayee, had recently said that he would remain in this position till May 2018, when he is due to retire, it remains to be seen whether he may be able to do it in the current circumstances. A former board member, on condition of anonymity, said there should be a restructuring of the Board, with Vishal Sikka who quit as CEO under controversial circumstances.Murthy has made it very clear that standards of corporate governance at Infosys have started plummeting, especially since 2015. This came to the fore, when Murthy questioned the quantum of severance package announced to former CFO Rajiv Bansal.
Infosys co-chairman Ravi Venkatesan, who had earlier spoken about the possibility of giving a formal role to the founder, on Friday said that such a possibility was ruled out. But he was clear that the entire debate about the relations between the founders and the Board had to be put to bed for a smoother transition, when the new CEO takes over. “They (founders) have the right to ask questions as shareholders of the company. On its part the Board has also been transparent, a former top management executive told FE. Apart from Seshasayee, Venkatesan and Sikka, the Infosys board comprises U B Pravin Rao, John W Etchemendy, Roopa Kudva, Punit Kumar-Sinha, Kiran Mazumdar-Shaw, D N Prahlad and D Sundaram.
It is said that the young employees of the firm were happy to have Sikka as the CEO. Many liked his understanding and expertise of the latest technologies and felt the company was making good progress especially in the automation and artificial intelligence aspects of the business. “The new CEO will have a tough time, if the differences between the Board and the founders are not settled by then,” said another source. The founders wanted to transition the company into a next generation IT player, and it was with this intention that Vishal was brought in from SAP. But with Sikka leaving, it remains to be seen whether the incoming CEO will continue to go down the route created by him, or chart a new path more amenable to the founders.