Infy Board Mem­bers Throw Weight Be­hind Se­shasayee

A day af­ter co-founder Murthy raised con­cerns over ‘de­clin­ing gov­er­nance stan­dards’ at In­fosys, se­nior ex­ec­u­tives and board mem­bers say non-ex­ec­u­tive chair­man R Se­shasayee has full con­fi­dence of the board and is un­likely to step down

The Economic Times - - Front Page - Our Bureaus

Bengaluru | Mumbai | New Delhi: Mem­bers of the In­fosys Board closed ranks be­hind non-ex­ec­u­tive chair­man R Se­shasayee in a strong show of sup­port, a day af­ter co-founder NR Narayana Murthy raised con­cerns over what he termed as de­clin­ing gov­er­nance stan­dards at the coun­try’s sec­ond-largest soft­ware com­pany. “Se­shasayee has the com­plete back­ing of the board and the man­age­ment, not to men­tion their full con­fi­dence in his lead­er­ship,” said a highly placed ex­ec­u­tive at the com­pany who did not want to be iden­ti­fied.

Se­shasayee, in par­tic­u­lar, has come un­der strong fire from the pro­mot­ers and ex-In­fosys ex­ec­u­tives. Former In­fosys CFO V Balakr­ish­nan said Se­shasayee should take re­spon­si­bil­ity for ‘gov­er­nance lapses’ and step down.

That is un­likely to hap­pen, ac­cord­ing to se­nior In­fosys ex­ec­u­tives and board mem­bers. “He (Se­shasayee) is a cor­po­rate vet­eran who has seen worse and he plans to stay the course,” said the ex­ec­u­tive men­tioned above, who pointed out that the man­age­ment and the cur­rent board had the back­ing of in­sti­tu­tional in­vestors.

“The stock of In­fosys did go up to­day, didn’t it?” he said. “Doesn’t that show the ab­so­lute con­fi­dence the in­duc­tion of “good peo­ple” like NYU Stern pro­fes­sor Marti Subrah­manyam as co-chair­man of the board, the re­place­ment of Jef­frey Lehman as head of an im­por­tant board com­mit­tee and ap­point­ment of un­named former In­fosys em­ploy­ees “schooled” in the com­pany’s val­ues as di­rec­tors.

In re­sponse to a ques­tion from ET on whether Se­shasayee had the back­ing of the board, in­de­pen­dent di­rec­tor Ki­ran Mazum­darShaw said, “Yes. We are a very co­he­sive Board.”

“Ev­ery­body is wel­come to sug­gest var­i­ous things. The board will eval­u­ate and take a view,” said Mazum­dar-Shaw, who is the founder of biotech­nol­ogy ma­jor Bio­con. “Just be­cause a sug­ges­tion comes from the pro­moter group, there is no obli­ga­tion for us to do things that way… We are not go­ing to sim­ply do things be­cause they (pro­mot­ers) are ask­ing us,” she said, adding that the board would se­ri­ously con­sider sug­ges­tions that were “right for the or­gan­i­sa­tion”.

The on­go­ing tus­sle at the very top of In­fosys could not have come at a worse time for the $150-bil­lion In­dian out­sourc­ing in­dus­try. In­dian IT com­pa­nies face slow­ing growth, in­creased pro­tec­tion­ism in their ma­jor mar­kets and ac­cel­er­at­ing tech­nol­ogy changes that threaten to un­der­cut their breadand-but­ter ser­vices.

In a bid to deal with the fall­out of the dis­pute, In­fosys has ap­pointed Cyril Amarc­hand Man­gal­das to in­sti­tu­tion­alise a process for it to re­ceive in­puts from the pro­mot­ers and other key stake­hold­ers. That has not gone down well with some old In­fosys hands. “Why should they bring a law firm in the mid­dle? It shows a lack of trust in your largest share­hold­ers and founders,” TV Mo­han­das Pai, an­other former CFO of In­fosys, told ET.

Some in­sti­tu­tional share­hold­ers are un­happy with the at­tempts made by In­fosys’ founders to in­flu­ence the com­pany. Op­pen­heimerFunds, which owns over $900 mil­lion of In­fosys shares and con­trols about 2.7% of the com­pany’s share­hold­ing through var­i­ous arms, asked the board to back CEO Vishal Sikka.

“Ev­ery­body is in a very emo­tional state of mind. We have to first calm down, and work am­i­ca­bly to­wards ad­dress­ing the con­cerns the founders have raised,” said Mazum­dar-Shaw. “The con­cerns raised by Murthy and other pro­mot­ers are all old is­sues, and they have been dealt with through a share­holder vot­ing process. Share­hold­ers over­whelm­ingly voted in favour. We have fol­lowed the due process and done noth­ing wrong,” she added.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.