Succession woes

It is the case of the known being better than the unknown when it comes to Infosys co-founder Nandan Nilekani being brought back to handle the succession crisis as the company transits from a promoter driven one to being led by a professional. The crisis at Infosys raises an important issue — whether promoters should have a preferential say in the succession issue. The promoters of Infosys have a total shareholding of little below 13 per cent and this has rightly raised questions, specially among foreign stakeholders, over the undue importance given to Narayana Murthy. Mr Nilekani’s task is to find a successor to Vishal Sikka who quit following constant criticism on his functioning by Mr Murthy. But what guarantee is there that the person Mr Nilekani selects will not face the same barrage from Mr Murthy? Mr Sikka, after all, was handpicked by Mr Murthy himself. The other co-founders were also said to be on Mr Murthy’s side. It seems as if promoters have the last say over professionals, a contentious problem that needs to be resolved. The promoters will have to be shown their place. No one would like a co-founder, however haloed, to be sitting like a wolf at the door ready to devour him at the slightest perceived corporate misdemeanour. There are other ways to deal with issues concerning corporate governance. For the present, perhaps much of the problems can be quelled if Mr Nilekani makes public the report that went into the allegations of excesses committed by Mr Sikka and that gave him a clean chit. It would clear the air. Since Mr Nilekani will be selecting the new board members, it would not be difficult on his part to handle the legitimate demands made by Mr Murthy without hurting the independence of the board.