Narayana Murthy says company boards can't be judge, jury and defendant on whistleblower complaints

Whistleblowing should not be an act of vengeance and the whistleblower should have proper data and proof to substantiate his claims against a company, Infosys' co-founder NR Narayana Murthy said at All India Management Association's (AIMA) 47th National Management Convention on September 21.

"An organisation should provide total protection to any whistleblower against the vendetta by the bosses," Murthy said.

An important function of a company board is to protect the dignity of the company as well as discharge its fiduciary responsibilities and therefore, addressing a whistleblower's complain in a transparent way is a must, Murthy said.

He said if the complaint is against a middle or low-level employee, an internal committee consisting of senior employees not connected to the accused, should be sufficient to investigate the claims.

"If the complaint is against any member of the board, including the chairman, the CEO or the executive director, then tendency of most Indian boards is to investigate such complaints themselves, assisted by an outside law firm... this is not a good idea because you cannot be the judge, the jury and the defendant," Murthy said.

In 2018, a whistleblower questioned corporate governance at Infosys and accused co-founder Nandan Nilekani of 'conniving with the current board to quietly bury all the wrongdoings of the earlier board.' In a letter to the Securities and Exchange Board of India and the US Securities and Exchanges Commission, the whistleblower had said Infosys "quietly revealed in the annual report that they had signed agreements for the mutual release of claims" with three directors who left the company last year.

In October 2019, whistleblowers accused Infosys' CEO Salil Parekh and CFO Nilanjan Roy for accounting irregularities to boost growth numbers. India’s second-largest tech major released a detailed report on the outcome of its audit committee investigation on a whistleblower complaint in January, which gave a clean chit to Infosys. The investigation was done with the assistance of independent legal counsel Shardul Amarchand Mangaldas & Co and PricewaterhouseCoopers.