Tuesday, September 19, 2017

Rahul Gandhi in USA

According to reports appearing in newspapers like The Hindu and The Hindustan Times, Rahul Gandhi is making a favourable impression on his audience in USA. There are atleast three reasons for this lucky break for Rahul Gandhi.

He is intensely tutored by Milind Deora and Shashi Tharoor from minute to minute. Rahul Gandhi is repeating what Americans want to hear about India. "India is intolerant." And third, expectations from Rahul Gandhi were pretty low. Compared to expectations, the performance has been better so far.

Is Rahul Gandhi turning over a new leaf?

Wednesday, September 13, 2017

Rahul Gandhi on dynasty

Rahul Gandhi was addressing students of the University of California - Berkeley. Times of India reported as under:

"Responding to a question from students, Gandhi said that he was “absolutely ready“ to take up an executive responsibility if the party asked him to do so. Responding to another question whether the Congress party was more associated with dynastic politics, Gandhi argued that India is being run by dynasties.

“Most parties in India have that problem So...Mr Akhilesh Yadav is a dynast. Mr Stalin (son of M Karunanidhi in DMK) is a dynast...Even Abhishek Bachchan is a dynast.So that's how India runs. So don't get after me because that's how they India is run. By the way , last, I recall, Mr Ambanis are running the business.That's also going on in Infosys. So that's what happens in India.“ "

Infosys is run by dynasts? Narayana Murthy and other founders of Infosys must be dumbfounded by this remark of Rahul Gandhi. A dynast gets hereditary powers. Assuming that Infosys is run by its founders (which is contested by the founders), how can Rahul Gandhi refer to them as dynasts? Is he clairvoyant enough to predict that children of Murthy and others will manage the company? Even otherwise, there is a difference between business dynasty and political dynasty. Business dynasts are owners of the business. Is Rahul Gandhi owning the Congress party?

Friday, September 01, 2017

Murthy's relative in Infosys' Board

Seshasayee has now responded to Murthy's uncomplementary reference to him. Murthy will react to this. The war of words will continue.

In October, 2016 D.N.Prahlad was nominated to the Board of Infosys. He had earlier resigned as an employee of Infosys. He is a relative of Narayana Murthy. There is nothing wrong in this arrangement. When questioned on this, Murthy refused to answer. The 'Father of Corporate Governance in India' could have been transparent about the purpose of nominating a relative as a director.

At that time, there were apprehensions about the role of Prahlad. As the Mint reported,

“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,” said the Infosys executive. “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?”
Surprisingly, Seshasayee went out of the way to defend Murthy:
"To be sure, Infosys has categorically denied the existence of twin power centres at the company. “First, there is no such twin power centres. That is completely wrong, and that will be very unfair to the promoters,” R. Seshasayee, non-executive chairman of Infosys, said in an interview last month. “Because, like I mentioned, Murthy has been an exceptional leader who has chosen to stay away and only give advice when sought from. So it will be utterly wrong (to claim otherwise).” The newspaper added, "Murthy did not respond to queries on the appointment."
Seshasayee must now be ruing why he showered an unmerited compliment on Murthy.
It is interesting to note that Nandan Nilekani was all praise for Prahlad in his first press conference on becoming chairman of the company. He knows how to keep Murthy in good humour.

Tuesday, August 29, 2017

The Economist on Murthy

The Economist compares Murthy and Bill Gates and exclaims:

"THE chairman of Microsoft, John Thompson, occasionally reminds one of its directors, a fellow by the name of Bill Gates, that his vote in board meetings is no more or less important than that of other members. Contrast that with Infosys, an Indian technology firm, whose own retired founder succeeded in getting its boss to quit on August 18th, after a months-long whispering campaign .The board was dismayed, but the outcome was all too predictable, given India’s penchant for treating corporate founders as latter-day maharajahs."

The magazine wisely adds, "Founding shareholders can be a resource for a company, but only if they know their place—in the boardroom, perhaps, but not on a pedestal."

The Economist also points out, "Mr Murthy has not received much in the way of gratitude for driving out Mr Sikka. Corporate-governance experts decried his method—notably a whispering campaign that suggested, but fell well short of proving, that Mr Sikka had profited from an acquisition Infosys made under his watch. Mr Murthy’s right to complain is also shaky. Though he is admired as a godfather of the tech scene, having pioneered the outsourcing model that has since become a major industry in India, he is a tiny shareholder in Infosys, owning just 0.38% of the company (his relatives own another 3% or so)."

Saturday, August 26, 2017

Nandan Nilekani's second innings

It is not politically correct to question the wisdom of Nandan Nilekani re-visiting Infosys. But one is taken aback by his hubristic remark that "there is nobody else. So, I had to come in. " Considering oneself as indispensable does not speak well of a leader. "I have a record of doing things successfully" is another boast (though this may not be far from truth)  he could have done without. Sometimes it is worth remembering that if one has not had failures, it means one has not tried enough things.

All this is not to belittle Nilekani's achievements. When deeds speak for themselves why should one belittle oneself through vainglorious utterances? Roll-out of Aadhaar is certainly a feather in his cap. Whether a sound move or not, Nilekani deserves appreciation for accepting the gauntlet with the hope of 'reviving' the governance culture of Infosys.

Having re-entered Infosys, Nilekani faulted in addressing the media without readiness to share relevant information. When asked if he would place in the public domain the investigation report on Panaya deal, he fidgeted saying that he would get briefed, study the reports with a calm mind and then decide whether or not to release the report. Release of this report was one of the major demands of Murthy. Has Nilekani spoken to Murthy on this?

Nilekani repeatedly asserted that he is the chairman of the company and therefore entitled to take appropriate decisions. Was it fair to deny the same privilege to Seshasayee? He told the media, "Give me the freedom to run the company and get it back to the path of progress." Is Murthy listening? Perhaps Murthy may not be so offensive to a fellow-promoter.

Nilekani seems to have understood the real problem facing Infosys. He kept saying how much he respects Murthy who gave him his first job at Patni's in Pune and who is "the father of corporate governance in India". Infosys' chairman needs to keep massaging Murthy's ego if he has to survive. But Nilekani has to decide: Who is more important, Infosys or Murthy?

Nilekani has clarified he would remain in Infosys till stability is established. In these VUCA days, stability is unknown. Nilekani may have to remain in the company for ever!

Friday, August 25, 2017

Corporate misgovernance

A new type of risk has been identified. It is called 'Murthy Risk'. It refers to the danger of a creator becoming the destroyer of what was created by oneself. This risk arises from the creator's possessiveness and gets aggravated by a 'holier than thou' attitude.

The recent contretemps at Infosys has been pragmatically solved by Nandan Nilekani's re-entry into the company. The chairman, R.Seshasayee has been shown the door though he has politely welcomed the development himself. He has exhibited his grace which is in marked contrast to Murthy's grouchiness.

Why did Murthy behave the way he did towards Seshasayee? Before hazarding my unfounded and probably prejudiced guess, let a few things be said about Seshasayee. The Hindu once reported,

"His (Seshasayee's) reaction to his upcoming move at Leyland from managing director to executive vice-chairman (from April) is similarly clear-headed. “It's necessary for the sake of the organisation to have a succession,” he says. “The next generation is coming up and we must make space for them.”It's all part of the larger evolution of his life, as he puts it: “You have to constantly ask yourself — where do I find joy next?”"

Seshasayee has a mature relationship with any position he occupies. While doing justice to the job on hand, he does not expect the relationship to last long. It is reported that when promoters opposed some moves made by Infosys while he was the Chairman, he offered to resign, but the Board asked him to continue. The promoters (mainly Murthy) have taken a different position from the Board now and made him exit.

There is an old news-report which says,"At the Infosys conference this Monday , board chairman R Seshasayee praised Punita, saying a woman should not be judged by the profession of her husband." 

Punita Sinha is a Wharton-educated distinguished professional who happens to be the spouse of Jayant Sinha, a minister in Modi's cabinet. Murthy criticised the appointment of Punita Sinha as a director in Infosys Board on the ground that it was political. Murthy's contention was misogynistic and smacked of opportunism to place Seshasayee on the mat. When Murthy was the chairman, Larry Pressler was a director on the Board. (Pressler is an American politician.) Was that okay?

Nilekani has said, "This company will be a Board-managed company." He could have added, "This Board will be a promoters-managed or more precisely Murthy-managed Board."

Seshasayee is a family-friend of Venu Srinivasan and Mallika Srinivasan. Murthy's son was earlier married to Srinivasans' daughter. Sometimes family happenings blinker one's professional vision.

Directors are elected by shareholders who alone have the right to sack them. Subjecting the directors' tenure to the whims and fancies of the promoter-clique operating from outside the Board is patently corporate misgovernance. He who 'walked away voluntarily' is not supposed to evict a Board-supported chairman and the directors who do not toe his line. Corporate democracy requires freedom from promoters' dictatorship.

A transient problem in a company has been resolved. But in the process, a timeless precedent of corporate misgovernance has been set.

Wednesday, August 23, 2017

System follows people

If people can misbehave, so can the system. The ugly confrontation between Murthy and the Infosys Board is closely followed by new bugs in the Finacle core banking solution. Finacle is a product of Infosys.

Bank of Baroda has notified its customers that it is migrating to an improved version of Finacle. Consequently, many deposit accounts have been unauthorisedly debited with various amounts. According to the bank's MD and CEO, the debits are being reversed on a war-footing.

It is a strange coincidence that Ravi Venkatesan, the co-chairman of Infosys is also the chairman of Bank of Baroda.