Saturday, April 30, 2011

Trinitarian Chair at Infosys

The three-member Nominations Committee has recommended that K.V.Kamath be the successor to N.R.Narayana Murthy as Chairman. Nothing surprising in this choice except that K.V.Kamath is also a member of the Nominations Committee. This is not the way corporate governance is practised. K.V. was earlier able to take the ICICI Bank to phenomenal heights through his able leadership though there are doubts about the way his successor at the bank was nominated which resulted in exodus at top management levels.

Kris Gopalakrishnan will be the Executive Co-Chairman of the company which will be renamed Infosys Limited. Narayanamurthy is to be Emeritus Chairman. Can a company be more top-heavy? It is a bit odd for a "global company" to be presided over by Trimurtys all from the same state. What kind of diversity is this? Some European companies no doubt have experimented with co-chairmen but not with remarkable success. When it is the turn of Shibulal to retire from CEOship, will Infosys have four chairmen? Concept of lean management ought to apply to the top also.

If all the chairpersons take their job seriously, there is bound to be continuing friction given their stature. If, on the other hand, they take it easy in the overall interest of the organisation, the multiple posts will be in the nature of sinecures. Either way, it is not the way to go forward.

Updated on 1st May: One is tempted to draw a parallel between Wipro's unsuccessful experiment with joint CEOs and Infosys' plan to have joint chairmen. It is true that jobs of CEO and chairman are not strictly comparable. Multiple CEOs are more likely to be dysfunctional than multiple chairpersons. Nevertheless, it is difficult to justify having more than one chairman on the grounds of either efficiency or governance. In the case of Infosys, the cause seems to be the imagined need to accommodate promoters' interests. This approach is not sustainable in the long run.

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