New strategy for Infy by October: Nilekani
New chairman’s other priorities: hiring CEO, reviewing Panaya probe reports
Nandan Nilekani, the new non-executive chairman of Infosys, has set his sights on creating a long-term governance structure in the company while focusing on short-term measures such as hiring a chief executive officer (CEO) and building a business strategy for growth in a challenging environment.
Nilekani did not give details about the future strategy, apart from saying it would be made public in October. Nilekani hit the ground running on his second day in office by appointing executive search firm Egon Zehnder to look for the replacement of former CEO Vishal Sikka, naming independent director D N Prahlad chairman of EdgeVerve Ltd, and committing to a broad-based engagement with all stakeholders, including the founders.
“There was nobody else,” Nilekani told reporters laughing, about his return to the country’s second-largest information technology firm, whose reputation and market worth took a hit after months of acrimonious battle between the company’s board and its founders. Backed by institutional shareholders, founders and employees, Nilekani also pointed that he was a consensus builder who had the ability to manage complex and fluid situations, and cited the work he had done in the Aadhaar project.
“I would like to believe that I am here not just as a founder. As you know I was CEO of this company and retired from that position 10 years back and in 2009, I was invited by the (then) Prime Minister Manmohan Singh to take a job in the government in the right of a Cabinet minister to do one of the world’s most sophisticated technology projects— Aadhaar. It has given over a billion people an identity and which is the fundamental basis for India’s transformation,” he said.
Nilekani, 62, who co-founded Infosys when he was 26 with N R Narayana Murthy and six others, tweeted that life had come full circle on his return. “I will stay as long as necessary. I will go once I am no longer necessary,” he said, indicating that this time around he had plans to fix gaps in Infosys governance, its relationship with Murthy, and the company’s long-term business strategy.
“The other goal is to talk about the relationship with Mr. Murthy who is a very valued and iconic founder and the father of corporate governance in India...he has made extraordinary contributions to India,” he said.
The Infosys board, which had accused Murthy last week of forcing Sikka to resign, a fallout of the public spat over governance concerns between the company founder and the board, went back on the statement under Nilekani’s leadership. Murthy first raised concerns over a year ago about the severance pay to former CFO Rajiv Bansal after he objected to the acquisition of Panaya, an Israeli technology firm. The year-long public spat led to Sikka’s resignation. Chairman R Seshasayee and two independent directors also quit subsequently.
The board admitted that it was “unfortunate that various differences of opinion have arisen between Mr. Murthy and the Board in the recent past” and “wishes to express that it was not its intention to cause Mr. Murthy or any other affected person any personal distress or anguish while stating its point of view”.
Nilekani said he would look at the investigation report that went into the Panaya acquisition, dispassionately and take appropriate action, but did not set a timeline.
Businessfocus
Soon after he took over, Nilekani held one-on-one interactions with senior leaders, including Interim CEO and MD U B Pravin Rao, Chief Financial Officer M D Ranganath, Merger and Acquisitions Head Deepak Padaki, and Deputy Chief Operating Officer Ravi Kumar S. He has formed a small “strategic group” to decide on the next strategy.
Driving the strategy would be Ravi Venkatesan, who remains as independent director, and Prahlad, chairman of Edge Verve and an independent director. They will present their report to the board in October. Nilekani also sought an update on each business, including the plans by former CEO Sikka, the targets set and where these plans stood in terms of execution or generating revenue. He also gave a glimpse of his strategy when he talked of enormous opportunities to help traditional companies that have been disrupted from players like Ola, Uber, Netflix and Tesla.
He said he was also open to adopting the vision of Sikka, who had pushed Infosys to become a software plus services firm than being a pure IT services firm. “I will ensure there are no discordant voices in the company, and everyone is on the same page. I want Infosys to be a board-managed company, with a board that will practise the highest standards of corporate governance,” he said.
Nilekani is hopeful that the challenges Infosys faces are transient. “One thing I have learnt from my time earlier at Infosys and at Aadhaar, and now, is that if you are able to deliver, everything else is insignificant,” he said.
This is the second time a founder has returned to Infosys to sort out its mess after Murthy came back in 2013 to reboot confidence among employees and customers, before he handed over the baton to Sikka in 2014. That seemed to be a short-lived experiment due to culture clash and the subsequent concerns over governance standards. Nilekani did not give a time frame for his second stint at Infosys.