This article
was first published in www.news18.com on
August 23, 2017
The Institutional Investor Advisory Services (IiAS) and
the institutional investors have written to the board of Infosys to bring back
co-founder Nandan Nilekani to stabilize Infosys and calm the nerves of
investors.
Promoters returning to head the companies they founded is
not a new phenomenon. Steve Jobs returned to Apple when the company was
floundering, Howard Schultz returned to Starbucks when recession hit the
company hard, and closer home, Narayana Murthy was brought back to Infosys in
2013 to restore its “bellwether status”.
It is therefore not surprising that the Institutional
Investor Advisory Services (IiAS) and the institutional investors have written
to the board of Infosys to bring back co-founder Nandan Nilekani to stabilize
Infosys and calm the nerves of investors.
The sudden but impending resignation of Vishal Sikka due to
the alleged “false, baseless, malicious and increasingly personal attacks” on
him by Murthy (representing the founders) brought back the Infosys board back
to square one, and their search for a new CEO began immediately. Chief
operating officer UB Pravin, an Infosys veteran, was made the interim CEO and
MD. Search for a CEO of a company as large as Infosys is always challenging.
Outside candidate: Any outsider with the right
credentials to head the company will need to tick the right boxes so that the
sword of Murthy does not hang on his head, like it did in the case of Sikka. If
the potential CEO is from the US, he would have to compromise on salary. He
would be expected to be “a compassionate capitalist”. He would be expected to
uphold the standards of governance that meet Murthy’s approval, board approval
won’t be enough. He would have to spend time and energy on replying to
allegations made through press meets and open letters. And then he must perform
as well. Can we imagine a Satya Nadella or a Sundar Pichai operating thus?
Internal candidate: T V Mohandas Pai, a former board
member, CFO and head of human resources, education and research at Infosys, had
said in an interview in 2013, when Murthy was brought back in an attempt to
stabilize the company, that many good senior people left the company because of
the succession of founder-CEOs. Good people were discriminated against because
founders took turns to become the CEOs even if they were not the best suited
for the role. Many others left the company after Sikka became the CEO, probably
due to a change in culture under Sikka, as also better opportunities outside
Infosys. Executive like Pravin (the current interim CEO), Ranganath D
Mavinakere (CFO), Ravi Kumar S, Rajesh Krishnamurthy, etc. were around even in
2014 when the search for a CEO was on and they were not selected to lead the
company. Appointing one of them now will be a ‘compromise’. It may calm the
nerves of the founders and the investors for the time being, but may not be the
best decision to take the company into the next orbit of competitiveness.
That leaves us with the founders themselves.
Founders: Murthy has already had two stints at
running the company. Why not a third? Given the acrimony between the board and
him, in the current scenario, it is impossible. Except, Nandan Nilekani, who
was the CEO of Infosys from 2002-2007 and co-chairman from 2007-2009, none of
the other founder CEOs have had an excellent track record. To be fair to Kris Gopalakrishnan,
he tided over the recession of 2008-09. He could be an option, but it seems
unlikely that he will be called back. That leaves us with Nilekani.
With the domestic institutional investors clamoring for him,
his personal equation with Murthy, his stint at Unique Identification Authority
of India (UIDAI) and a man who has kept up with technology and played a major
role in digitizing India, he does seem like someone who could work.
At this juncture, in the best interest of the company,
debates like founders versus outsiders, old guard versus new blood, could be
kept aside. Nilekani, if he accepts to come back to the company, must do it for
the long term though. It should not be a stop gap arrangement, like it was when
Murthy was called back in 2013. Nilekani has age at his side. He is just 62. He
should steer the company to the next orbit in the next 7-8 years while grooming
a couple of people to take over the mantle when he finally retires.
The founders faltered in succession planning in their first
stint at Infosys. They should not repeat the mistake when they get the chance
to do it in the second stint. With this, we hope that Nilekani does accept to
come back to Infosys!
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