Infy’s former honchos want board to step down

Infosys co-founder NR Narayana Murthy and the IT major’s former top executives have asked for its board to step down, as they believe that the company’s corporate governance has been severely compromised.

Former Infosys CFO V Balakrishnan told BusinessLine that the board had not addressed the concerns (around corporate governance) raised by a ‘significant’ shareholder. “You can’t handle a publicly-listed company this way. There is no longer any trust between the board and the founders,” said Balakrishnan.

Murthy has publicly stated that founders have noticed a slide in governance standards since June 2015 which, he said, was a major cause of concern.

Proxy advisory firms like InGovern, which lists former Infosys CFO Mohandas Pai as one of its advisers, have raised issues about the handling of compensations and severance pay to some of the executives.

“We had raised issues around severance pay of former CFO Rajiv Bansal, the abrupt dismissal of the Chief Compliance Officer and the appointments of certain independent directors which, if not stated clearly, can result in conflict of business interests,” said Shriram Subramanian, founder and MD, InGovern.

Some former senior executives BusinessLine spoke to said the current board was not competent to handle a large and complex organisation like Infosys, and have hence sought the removal of R Seshasayee, who was the Non-executive Chairman of Ashok Leyland before joining the IT major’s board as Chairman.

However, Infosys Independent Director Kiran Mazumdar Shawsaid there had been no breach in corporate governance. “It is unfortunate that it has been made into a governance issue. Considering that the hefty severance package given was arrived under very complex circumstances, it is up to the management to make these judgment calls,” she added.

Institutional investors like OppenheimerFunds, which owns 2.7 per cent in Infosys, has also come to the company’s rescue. In a letter it said: “There have been loud, cancerous rumours of intervention by non-executive founders in the management team. The bottom line is that, in our opinion, after many years of internal volatility and competitive underperformance, it is encouraging to see that the CEO Vishal Sikka has stabilised the core and articulated a clear — and appropriate — long-term strategy to help Infosys thrive amidst industry disruption,” it noted.