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It is all out war at Infosys. After months of maintaining restraint over the founders' allegations against chief executive Vishal Sikka and the current management style at the company, the Board on Friday made it clear that it will not let NR Narayana Murthy be a part of the company.
“At this point the Board has no intention of inviting Narayana Murthy to be a part of the formal governance of the company,” said Ravi Venkatesan, co-chairman of the Infosys board in the first investor call after Sikka stepped down.
Beginning the call by thanking Sikka for setting the vision for Infosys in the coming few years, Venkatesan said the board was thankful to the former SAP executive. “This is no longer just Vishal’s vision. This is now Infosys' vision; thanks Vishal for embedding it deeply. The Board constituted a committee of directors, and we engaged very deeply with Vishal and the management team to accelerate the execution of it,” he said.
Sikka has been focusing on the themes of digitisation, artificial intelligence, increasing local onshore workforce and improving company performance.
Thanking the board and Infosys for the opportunity, Sikka said that over the last year, the industry has grappled with issues such as Brexit, US President Donald Trump’s election and rising protectionism in other markets, which were in some ways, welcome challenges.
“That sort of things are things you can deal with, but what’s been going on since the last four or five quarters, especially since February, this continuous drumbeat of these allegations, news stories, the same stuff over Rajiv’s [Bansal] separation, Panaya [acquisition controversy]…..is absolutely sickening,” he said on the call.
Calling news reports and media coverage questioning and “asking for 4000th regurgitation of the same nonsense,” Sikka said he was left “spending way too much time dealing with and responding to the noise”.
Infosys has been embroiled in a bitter battle of allegations and counter allegations by its co-founders, primarily NR Narayana Murthy, questioning corporate governance practices at the IT services major.
Beginning from questions such as former chief financial officer Rajiv Bansal’s severance pay, to appointment of independent director Punita Sinha to the company’s board, and irregularities in the acquisition of Israeli software firm Panaya, the issues have refused to die down.
The latest affront was a letter written by Murthy saying Board members think Sikka was chief technology officer material and not CEO material, and also questioned corporate governance at Infosys.
“It has gotten increasingly malicious and personal,” Sikka said on the call on Friday.
The company’s Board also sent out a strongly worded reply to the allegations in Murthy’s latest letter, citing his “continuous assault,” as “the primary reason that the CEO, Dr. Vishal Sikka, has resigned despite strong Board support”.
Sikka was at pains to say that while everyone on the Board asked him to reconsider his decision, the issue “drains so much energy that it does not create an atmosphere that is conducive to transformation”.
Noticeably, Sikka did not mention Murthy by name, either in his letter to the employees or during the call. He thanked several of his colleagues by name but refrained from referring to Murthy.
Venkatesan added that the board has engaged with the founders over the past year and thinks it has done everything that is reasonable. "We have reached a situation that is not tenable," he said, adding that the Board's decisions have not gone down well with the founders.
However, to a question about whether Infosys’ Board enjoys investors’ and shareholders’ confidence, Venkatesan said that the company will continue to assess their sentiment over the next few weeks.
UB Pravin Rao, the interim CEO and managing director, was also on the call.
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