Infy Man­age­ment Should not Get Dis­tracted by Noise: Se­shasayee

Chair­man de­fends de­ci­sions that some founders crit­i­cised, says co com­mit­ted to high­est stan­dards of cor­po­rate gov­er­nance

The Economic Times - - Front Page -

In­fosys chair­man R Se­shasayee de­fended the man­age­ment de­ci­sions that have sparked an es­ca­lat­ing row with the IT com­pany’s founders led by NR Narayana Murthy. Break­ing his si­lence on the mat­ter, Se­shasayee told Kala Vi­jayragha­van and Li­jee Philip in an in­ter­view that he had no in­ten­tion of quit­ting since the board had de­clared its full faith in his lead­er­ship. He also re­jected the ac­cu­sa­tion by for­mer board mem­ber TV Mo­han­das Pai that the board hadn’t been com­mu­ni­cat­ing with the In­fosys founders. Murthy had al­leged breaches of cor­po­rate gov­er­nance stan­dards in an ex­plo­sive in­ter­view with ET last week. These re­lated to what was con­sid­ered an ex­ces­sive sev­er­ance pack­age for for­mer CFO Ra­jiv Bansal and CEO Vishal Sikka’s com­pen­sa­tion. Se­shasayee said less than a third of Bansal’s agreed sev­er­ance had been paid out and that Sikka’s com­pen­sa­tion was fully aligned with the in­ter­ests of stake­hold­ers. Edited ex­cerpts:

There is spec­u­la­tion you will step down.

The board has ex­pressed its full con­fi­dence in my lead­er­ship, as has been made clear in the press re­lease. The share­hold­ers elected me to the board, and the board sees no rea­son what­so­ever for me to step down. What­ever de­ci­sions that have been taken are col­lec­tively taken by the board. I have been given a job to do and I in­tend do­ing it con­sci­en­tiously.

This is not a fight for con­trol... so what is the is­sue?

We don't have an is­sue with any­one. As you say, this is not a fight for cor­po­rate con­trol. We are a pro­fes­sional board and we are com­mit­ted to up­hold the high­est stan- dards of gov­er­nance that this com­pany has al­ways been known for. We recog­nise that there could be dif­fer­ent view­points when it comes to a busi­ness judg­ment. We are sen­si­tive to these view­points from dif­fer­ent stake­hold­ers and will al­ways cal­i­brate our ac­tions, tak­ing these into ac­count. Mo­han­das Pai says there is no en­gage­ment be­tween the founders and the board... why do you need a law firm here?

This is com­pletely un­true. We have been con­tin­u­ally en­gaged with the founders. I and the board mem- bers col­lec­tively have had sev­eral con­ver­sa­tions with the founders, over the last one year. We had a meet­ing be­tween the board mem­bers and the pro­mot­ers as late as Jan­uary 2017! Cyril Amarc­hand Man­gal­das have been en­gaged, not be­cause there is a dis­pute, but in or­der to re­ceive in­puts on gov­er­nance pro­cesses and struc­tures, in­clud­ing board com­po­si­tion, not only from the pro­mot­ers, but also from other key stake­hold­ers. Sev­eral names are be­ing sug­gested to be part of the board. Will the board com­po­si­tion change?

If there are pro­pos­als for nom­i­na­tions to the board from dif­fer­ent groups of share­hold­ers, we need a process to se­lect them, and en­sure fair rep­re­sen­ta­tion within the frame­work of law, while not com­pro­mis­ing the char­ac­ter of an in­de­pen­dent board. Cyril Amarc­hand will guide us in this process.

Do you think the com­pen­sa­tion paid to (for­mer chief fi­nan­cial of­fi­cer) Ra­jiv Bansal was too high? What are the con­cerns of the founders here? First, we are talk­ing about a de­ci­sion that was taken in Oc­to­ber 2015. The de­ci­sion was to pay Ra­jiv Bansal a sev­er­ance pay of Rs 17.38 crore. The cir­cum­stances were ex­plained sev­eral times. This took into ac­count com­plex cir­cum­stances and it was a bona fide busi­ness judge­ment.

Sec­ond, the amount that has ac­tu­ally been paid is only Rs 5.2 crore! The bal­ance pay­ments have been sus­pended since April 2016 and the rea­sons for sus­pen­sion have also been ex­plained.

Third, please see the press re­lease dated Oc­to­ber 21, 2016. It’s a suo moto dis­clo­sure com­pre­hen­sively ex­plain­ing the in­ves­ti­ga­tions done on the ba­sis of an anony­mous com­plaint that al­leged that this could have per­haps been hush money, the find­ings by in­de­pen­dent and re­puted law firms af­ter ex­haus­tive in­ves­ti­ga­tion that there was no im­pro­pri­ety what­so­ever, and the dis­clo­sures made thereon. what more needs to be done.

Why have these is­sues sur­faced now? As the chair­man of In­fosys, what are your big­gest pri­or­i­ties now? As the chair­man, my big­gest pri­or­ity is to en­sure that the man­age­ment does not get dis­tracted by all these noises and con­tin­ues to fo­cus on the many chal­lenges and win the mar­ket bat­tle while the board con­tin­ues to do its job of gov­er­nance to the high­est stan­dards.

In­fosys is in a unique sit­u­a­tion in terms of the board man­ag­ing the com­pany and the busi­ness en­vi­ron­ment it is fac­ing. In­fosys has a unique con­struct in terms of a pro­fes­sional board over­see­ing a pro­fes­sional man­age­ment.

In a con­struct where the owner or the pro­moter or the chief ex­ec­u­tive is the chair­man, it’s easy to func­tion, be­cause the power cen­tre is given. Right or wrong, every­one will obey the leader. There is no room for dis­sent be­yond what the leader will per­mit. In our con­struct, there is a phe­nom­e­nal ef­fort re­quired to build con­sen­sus within the board, be­tween the board and the man­age­ment. Given this com­plex­ity, you can see how suc­cess­ful we have been to have a co­he­sive board and an aligned man­age­ment.

And, what's more, we are judged by stan­dards far higher than any other com­pany.

How im­por­tant is it for the founders and the pro­fes­sional board to be in sync with each other? As a board, our task is to find a way to move for­ward in the best in­ter­est of all share­hold­ers col­lec­tively. Take the CEO Un­for­tu­nately, it does. We have no choice but to work harder. It takes courage and com­mit­ment to keep run­ning up­hill while a rain of ar­rows are be­ing shot at you. But we are de­ter­mined to suc­ceed.

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