Proxy advisory firms have kicked up a social media storm over Infosys independent director Kiran Mazumdar-Shaw’s tweet about the quality of a presentation made to the Board. Shaw, who is one of the recently appointed independent directors of Infosys, tweeted on April 18 that she was ‘most impressed’ by close friend and Infosys founder NR Narayana Murthy’s son Rohan Murty’s ‘brilliant tech-loaded presentation, which will enormously benefit Infy.’
Advisory firms objected, saying that matters within the Board should remain there, and that the tweet is likely to mislead stakeholders on Murty’s role. But what was the market moving information which Shaw has allegedly leaked?
If she had instead commented on Murthy’s son’s presentation on how to get client scores up for the company (which is an area of concern) or a change in strategy going forward, this could have been deemed ‘important’ or ‘strategic’.
The rules are clear. On the issue of using social media, SEBI has clearly mandated that listed companies in India can tweet their earnings on Twitter or update their status on Facebook, as long as they provide market-sensitive information to stock exchanges first.
SEBI also says that listed companies have to put in place controls and procedures to monitor their activities online and administer any information posted by the management.
The outrage of the proxy advisory firms is difficult to understand, when Shaw doesn’t appear to have actually violated SEBI provisions. Their righteous anger also seems a little contrived, when seen against the fact that they did not let out a whimper on issues of greater significance to Infosys (and other) stakeholders.
Take a recent announcement made by the company. Its Chief Compliance Officer quit the company a few days back and announced a replacement who would also look at “further strengthening” their whistle blower strategy.
When the Jay Palmer issue on alleged retaliation against him was in focus, why did these firms not pick on Infosys for failing to adhere to corporate governance practices? (By way of background, Palmer, as an Infosys employee in the US, had in 2011 raised the issue of alleged visa malpractices, for which the company reportedly hit back. Palmer subsequently lost the case in a US court.)
Perhaps it is the advisory firms which need a crash course in social media, if not corporate governance ethics.
Special Correspondent