Thursday, July 07, 2016

Conflict of interest: who is to blame?

It is argued by some that Jayant Sinha, an alumnus of IIT, Delhi and Harvard Business School and a former investment banker, was packed off from the Finance Ministry because of conflict of interest emanating from his spouse being nominated as an independent director by Infosys. Dr.Punita Kumar Sinha is an alumnus of IIT, Delhi and Wharton School.

"Conflict of interest" may well be a red herring. Jayant Sinha's shift from Finance to Civil Aviation is more likely a message to his rebellious father, Yashwant Sinha, who keeps criticising the NDA government off and on. A minister's spouse occupying a position by one's own merit should not normally be mistaken as conflict of interest.

But since Caesar's wife must be above board, it is advisable to avoid such positions. In the instant case, Infosys also needs to be blamed. The company needs to introspect and truthfully satisfy itself that the appointment would have taken place even if Jayant Sinha was not in the Finance ministry. It may not be blatant cronyism, but is cronyism nonetheless. This is a test for Infosys's much-vaunted corporate governance standards.

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