Prahlad, a relative of founder NR Narayana Murthy, was appointed as an independent director on the company board last week.
InGovern Research Services will question the appointment of DN Prahlad to the Infosys board when it comes to the table for shareholder approval. Prahlad, a relative of founder NR Narayana Murthy, was appointed as an independent director on the company board last week.
The appointment seems to suggest that the founder-promoters, none of whom are on the board, finally have their man on it, the Mint reported on Tuesday.
“Prahlad certainly seems to be a nominee of the founders,” said Shriram Subramanian, founder and managing director of proxy advisory and corporate governance firm InGovern Research Services. “It is clear that by having Prahlad on the board, the founders want access to the board and ability to influence decisions,” he told Mint.
Prahlad’s firm Surya Software Systems also does some business with Infosys. Infosys maintains that work done by Surya with Finacle, Infosys’ core banking platform, is not large and Prahlad’s appointment is in “compliance with the relevant definition under the Companies Act”. That could well be the case, the Mint reported.
“The Board receives several inputs from various quarters, and takes decisions solely in the best interest of the Company. These include CEO compensation and inductees to the Board,” a spokeswoman for Infosys told the paper.
Murthy did not respond to Mint’s queries on the appointment.
Subramanian said his firm will surely question Infosys’ decision to appoint Prahlad when the company seeks shareholder approval.
An Infosys executive told Mint that Prahlad’s appointment was yet another indication of Murthy’s continued influence at Infosys.
Mint report quotes him saying the “The worrying thing of this appointment of an executive perceived to be close to the founder is what message it sends to the senior leaders at the company,” “If the board agrees to have a representative of the founder, then leaders clearly are told who is more important. So, can the CEO really have his team rally around him?”
Vishal Sikka is Infosys’ first non-founder Chief Executive Officer.