Infosys governance: Murthy makes peace with board
bengaluru — Billionaire Narayana Murthy is calling off his fight with the board of Infosys, saying he’s confident the IT giant he co-founded will deal with the concerns raised about corporate governance.
The comments came after an intense confrontation that pitted the board, chairman R. Seshasayee and CEO Vishal Sikka against a clutch of co-founders led by Murthy. Their apprehensions about management of Asia’s second-largest IT services company emerged last week, and included concerns over a spike in the CEO’s compensation and large severance packages for two departing executives.
The criticism from Murthy and fellow billionaires Nandan Nilekani and Kris Gopalakrishnan burgeoned into a public confrontation over governance at Infosys. At one point, Murthy called for a board shuffle. On Monday, the entrepreneur softened his tone, calling Seshasayee a man of “highest integrity.”
“Let me stop. I have made a point, paying such large sums of money is confusing. Now they have to sort it out,” Murthy said. “I felt that I don’t want it to snowball. I don’t have the time. Neither should the board and the management be spending time on it.”
On Friday, an Infosys director said the company had appointed a law firm to handle all communications with Murthy and the other co-founders, stressing the need for transparency in dealings. But Murthy said on Monday it was time for him to call a truce.
Infosys’ shares were up 1.3 per cent at 1.06pm in Mumbai, outperforming a slight fall on the benchmark Sensex. A cease-fire allows management to focus on addressing that business-model disruption and deal with the changing US regulatory environment, said Ajay Bagga, executive chairman at OPC Asset Solutions. “Anything other than these is a needless distraction that consumes valuable bandwidth and resources,” Bagga said.
“The company and sector is at a
Let me stop. I have made a point, paying such large sums of money is confusing. Now they have to sort it out
Narayana Murthy,
Co-founder of Infosys
critical point with all the external challenges,” said Vikas Gupta, chief investment strategist at OmniScience Capital. “The founders can have a different point of view than the current management but if they have given the current management an objective, they have to let them drive it their way and not impose old-school thoughts, whether right or not.”
Sikka is pushing Infosys deeper into automation and artificial intelligence as clients tighten spending in an uncertain environment and begin to shift IT into the cloud. The chief executive later told an investor conference in Mumbai that his relationship with the company cofounders “is wonderful.”
“I would like to assure every single shareholder that corporate governance and values were, are and will be the core foundation of this company,” Sikka said in a text message sent by Infosys. “I will not let that standard slip even an iota under my watch.”
Asked if the row was over, Murthy said: “Yes, I think so. The reality is that these things happen. It is a good idea not to unnecessarily muddy it up further.” — Bloomberg