The Infosys drama

The whistle has been blown once again in Infosys. It is alleged with recorded evidence that the CEO Salil Parekh and CFO Nilanjan Roy care two hoots for accounting niceties and they have been exhorting the Finance team to play ball. The whistle-blowers claim that the CEO has told the Finance team, "No one in the board understands accounting principles, they are happy as long as the share price is up. Those two Madrasis (Sundaram and Prahlad) and Diva (Kiran Mazumdar-Shaw) make silly points, you just nod and ignore them."

If the CEO has really said what is ascribed to him, he has no right to continue in the company. If the CEO has no respect for the board, either the CEO or the board needs to quit right away. It is easier for the company if one person departs. The term 'Madrasi' has multiple meanings. Originally it referred to a person from Madras Presidency which was a substantial part of southern India. Later on, the word started representing anyone from the Madras state (now called TamilNadu). There was a time when the north Indians would refer to anyone uncomfortable with Hindi as a Madrasi. Now that most people from the south are proficient in Hindi, this epithet has lost its linguistic meaning.

The sense in which Salil Parekh has used the term perhaps is that any person who asks an inconvenient or trivial question is a Madrasi.  Prahlad, a relative of N.R.Narayana Murthy is probably not a Madrasi since he could be from Karnataka. Since the CEO is averse to Mr.Prahlad, he may also be spoiling his relations with NRN which means that Parekh's departure is only a matter of time.

Mr.Seshasayee, a former Chair of the board, must be enjoying the fun now. He was overthrown unjustly or so it appears in retrospect. It is time for the present Chairman, Nandan Nilekani to take tough decisions. He has to explain why the board has apparently been quiet for almost a month since the whistle was blown. The audit committee has belatedly retained Shardul Amarchand Mangaldas and Co. to investigate the matter. A predictable but costly trick to buy time.

The drama taking place in a company whose promoters are justifiably known for better corporate governance is a cruel joke on the shareholders. The company's share has lost 14% of its value in the market since the news became public. Who or what is to be blamed for this? The CEO's urge to 'perform' by hook or crook or the market's expectation of sustained growth or the board's incapacity to assess how the company was faring or the 'Madrasis' ' penchant for questioning?

Travesty of Governance in Infosys

So, Nandan Nilekani has concluded that there was nothing wrong in the acquisition of Panaya. Though he did not say in so many words, this meant that Narayana Murthy's theatrics was much ado about nothing. But Nilekani is a diplomat. He has proved his ability to work with effortless ease in both private and public sectors. He knows the importance of humouring Murthy if he has to succeed in Infosys.

Accordingly he has once again acknowledged the leadership role Murthy has played in building Infosys and in corporate governance matters. He looks forward to building a trusting relationship with Murthy.

Narayana Murthy expectedly has expressed his disappointment that Nilekani has given a clean chit to the previous Chairman, Seshasayee and the Board that he led. Et tu, Nilekani ?

Nilekani has offered a face-saver to Murthy by stripping Roopa Kudva of leadership of the Audit Committee. She is replaced by D.Sundaram who continues to retain Murthy's trust (friendship?). The company has unceremoniously deprived her of this position without assigning any reason. If she is now found to be unfit to lead the Audit Committee, she may not be fit to be a director either. She could have resigned from the Board.

Seshasayee has responded with grace. He has expressed the confidence that the company can now focus on business without any distraction. He has proved to be mature enough not to wax proud that Murthy's co-founder could not fault him in the Panaya deal.

It is regrettable that Murthy refuses to bring this sordid drama to a close. His lament that we may never know the truth exposes his distrust in the Board now inclusive of his relative Shri Prahlad and his co-founder Shri Nilekani. Persons like Narayana Murthy have to ask themselves the question, "Are we the only honest persons in the world?"

Mohandas Pai is continuing what he thinks is his role. He keeps provoking Murthy. Hopefully, Murthy will be less obstinate and irascible in future. Founders of the company had earlier expressed their desire to participate in the equity buy-back programme. Murthy will certainly do the company a favour if he also offers his shares to the company. Nilekani can then diplomatically express the company's decision to buy back Murthy's shares (as much as permitted) 'with regret'.

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.

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)."

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!

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.

Narayana Murthy fails the 'FAT' test

Narayana Murthy, the anguished co-founder of Infosys, was never tired of saying that Fairness, Accountability and Transparency were foundations of corporate governance. Nobody can take exception to this motherhood statement. It is only fair that Murthy also is tested on this.

These three qualities are required not only of the company and its management, but also of its founders. Murthy has been less than fair in constantly sniping at the Board of Directors. He rightly expressed his concern over excessively liberal payments made or sought to be made to an ex-CFO and an ex-legal counsel. He went overboard in making this the litmus test of corporate governance. The Board and the Chairman were certainly on a weak wicket on this issue. Murthy exhibited his petulance by throwing a public tantrum over this. His call to the Chairman was : "Admit your guilt and quit." He prejudged the issue, converted a possible mistake into guilt, pronounced judgement and wanted his pound of flesh. He was atrociously belligerent.

Murthy was always diffident about inorganic growth. It is therefore not surprising that he cried wolf when Panaya was acquired. $200 Million may be small change for Infosys and Sikka, but it was a princely sum for frugal Murthy. Murthy started casting aspersions on Sikka by referring to association of a SAP executive with Panaya. The acquisition value was decided on the basis of due diligence by respected agencies. When Murthy cried foul, the Board appointed external investigators who found nothing amiss in the Panaya deal. Murthy was not convinced. He did not mind becoming a rebel without a cause.

As a co-founder of the company, Murthy is accountable to fellow-shareholders. Non-stop washing in public of dirty and not-so-dirty linen amounts to abdication of his responsibility towards other stakeholders in the company.

His transparency has been questioned by the Board which in a damning statement has claimed that Murthy desired his demands on appointment of directors be met without attributing the changes to him. This is stealthy secrecy and not trust-worthy transparency.

Murthy is reducing himself to a sanctimonious humbug. No wonder Omkar Goswami felt it necessary to address an open letter to him:

http://economictimes.indiatimes.com/tech/ites/when-you-gotta-go-you-gotta-go-former-infosys-board-member-tells-murthy-in-open-letter/articleshow/60169401.cms

Narayana Murthy's allegations

There is no doubt that Mr.Narayana Murthy has made serious allegations against the Board of Infosys. He has alleged that the company's governance standards have plummeted since he, his co-founders and early adopters like Mohandas Pai and Balakrishnan left the company voluntarily in 2014.

Murthy has demanded quite a few responses from the Board. Some interesting aspects are covered here. While reading these demands, doubts may arise in our minds. These are also pointed out.

"The most worrisome aspect of the whistle-blower accusation is his or her claim that there was an e-mail sent by Mr. David Kennedy to Dr. Vishal Sikka that Mr. Kennedy could not hide the Bansal agreement from the board and the CFO any longer. It is best that the company scotches this accusation either by denying the existence of such an e-mail with proof and clearing the names of both Mr. Kennedy and Dr. Sikka, or by explaining to the shareholders what action was taken against the individuals who hid information from the board and from the new CFO who signs the SOX statement. "
Doubt: In case such an e-mail does not exist, how does the company prove its non-existence? Presence is provable. Is absence also provable?

"The general belief among a large number of shareholders is that the current attitude of the board is a clear example of the worst board governance in India’s corporate history."

Doubt: Since Murthy believes in data and data alone, does he have enough evidence say by way of a survey to prove his contention?

"Several investors have expressed concern about the lack of transparency in the press release on the Gibson Dunn Crutcher (GDC) Report. The general impression in the market is that the Infosys board has spent lots of shareholder money in hiring expensive lawyers and obtained a clean chit for themselves from these lawyers. It is very important to remember that none of these expenses would have been incurred if the board and the company management had not committed serious mistakes regarding Rajiv Bansal agreement and David Kennedy agreement."

Doubt: Murthy raised doubts about these agreements with ex-CFO etc. necessitating further investigation. Is it proper for Murthy to blame the Board for ordering these investigations? Murthy has also clarified that he had advised Seshasayee to obtain investigation reports from impartial agencies (he had named a few including some former independent directors). Is it proper for Murthy to complain about the cost now? Of course, the Board did not go by Murthy's recommendation regarding agencies named by him.

"It would be proper for the board to put all the three investigation reports (Cyril Amarchand Mangaldas (CAM) Report, Latham and Watkins (LW) Report and Gibson, Dunn and Crutcher (GDC) Report) and the Panaya valuation report on the website of the company, and also provide a point-by-point denial of the whistle-blower accusations fully supported by data and facts. The whistle-blower has made serious allegations and just a top-level press release is not sufficient. The company should provide answers to the following questions emanating from the whistle-blower accusations. This should not be difficult since the board claims that three separate well-known law firms have investigated the issues thoroughly and since the board has spent huge amount of money on investigations."

Doubt: Murthy is unclear whether he says that the whistle-blower's accusations are fully supported by data and facts or he wants the Board to clarify with data and facts. Sowing seeds of suspicion by skillful positioning of words is an art.

"a. Can the company categorically deny that any employee and / or his / her relative (spouse, father, mother, brothers, sisters, nephews and nieces, children, spouse’s father, mother, sisters, brothers, nephews and nieces) benefitted personally in the Panaya acquisition?"

Doubt: Is it expected of any company to take a declaration from every employee that there is no personal benefit to him / her and relatives in an acquisition? Murthy would be justified in restricting his enquiry to directors and top management.

"c. If the answer to question 2a is YES, then can the company provide the names of Panaya investors related to Infosys employees with the nature of their relationship to the Infosys employee (spouse, father, mother, brothers, sisters, nephews and nieces, children, spouse’s father, mother, sisters, brothers, nephews and nieces) and the number of shares they held on the date that Panaya was acquired by Infosys?"

Doubt: Does Murthy mean 'if the answer is NO'?

"Has the culture of the company changed (since the founders left) to reward people who hide information from the board?"

Doubt: Good sarcasm.

One person has responded to Murthy's efforts to pin down the Board as follows:

Richard Armond: "Infy under Mr Murthy was a better managed company and grew much faster than under Sikka. Today Infy can barely keep up with the growth of its peer IT companies in India. There have been murders on campus and a rape. Yet, today deluded Infy employees are more rattled by Sikka's exit."

Doubt: Would Murthy's next missile deal with murders and rape in Infosys?

The Infosys imbroglio

The Infosys drama continues to play out with striking similarities to what tanspired in the Tata group when Cyrus Mistry was ejected out.

Vishal Sikka claims that persistent attempts by N.R.Narayana Murthy to malign the company's Board and top management derailed any move by the company to improve its performance. Murthy counters saying he is focusing on governance and not performance.

Sikka came from SAP, a renowned German company. Financial performance counts for every company and it is so for German companies also. Remember the Volkswagen scam involving tampering with fuel gauge ? Coming from such a background, Sikka puts performance over everything else including corporate governance.

Governance has both legal and ethical dimensions. Most CEOs prioritise the legal aspect over the ethical requirements. Laws are strictly defined. Ethics are not so. That is why people are more confused than enlightened when Ratan Tata boasts about the Tata Culture and Murthy obsesses with his version of Corporate Governance. Significance of ethics in management should not be trivialised. At the same time, we need to bear in mind that there are acceptable ranges in ethical behaviour. Anyone who has a smattering of Mahabharata would appreciate this.

Murthy carries a burdensome baggage. He feels adrift since leaving the company. That is why he made a comeback. Though for all outward appearances he welcomed professionalisation of management with the exit of promoters from management, he did not have a proper understanding of his self. He continues to be possessive about the company he and his co-promoters formed. His intellect which is not very sharp hesitantly accepts the need for professionalisation. But his heart continues to crave for active association with Infosys. He continues to suffer from Founders' Curse.

This dichotomy between what is good for one's creation and what is psychologically comfortable for oneself is not uncommon. The dissonance arising from this has to be resolved in a mature manner. If it is not resolved in time, it leads to street brawls like what we are witnessing in Infosys today.

Issues raised by Murthy are of course not trivial though they could have been sorted out in a less amateurish way. Persons like Seshasayee, Ravi Venkatesan ,  D.Sundaram  and Roopa Kudva are not men of straw and cannot be trifled with. So, Murthy's non-stop allegations against the Board (though he tries to sound a little more pleasant by seeming to accept their proven credentials) are in poor taste and are an inescapable consequence of his own split personality where brain and heart are at war.

Other promoters like Shibulal, Nilekani, Dinesh and Gopalakrishnan have maintained a dignified silence. This is at variance from the cacophonic support extended to Murthy by the former CFOs who were appointed by Murthy. Mohandas Pai has not covered himself with glory by egging on Murthy.

Murthy has been petulant. The Board has been flat-footed and out-manoeuvred by both Murthy and Sikka. Shareholders have learnt a painful lesson that neither promoters nor the management care for the company. If either Murthy or the Board does not exhibit flexibility in dealing with the other, a company that was showcased as an exemplar combining governance and performance would fall between two stools. Both Murthy and the Board owe it to the company and its shareholders to mend their ways.

NRN vs Vishal Sikka: Possessive promoter vs Pragmatic professional?

Corporate Boardroom battles are becoming more common these days in India too. Ratan Tata has succeeded in ejecting Cyrus Mistry from all Tata companies with a speed atypical of sedate Tatas. The Parsi community is no doubt aghast. But Ratan Tata is unable to let the Tata companies get on with their job without singing his glory at frequent intervals. Simply stated, he continues to be possessive about what he considers to be his legacy.

N.R.Narayana Murthy is playing Ratan Tata in Infosys. When Cyrus Mistry was anointed chief of Tata Sons, Ratan Tata was effusive in his praise for the former's sagacity. Similarly, NRN was unabashed in showering encomium on Vishal Sikka when the latter took over the reins at Infosys. The lovefest has proved to be short-lived. NRN is upset over Sikka's disregard for Infosys' penchant for 'corporate governance' just like Ratan Tata was angered by Mistry's unconcern for 'Tata culture.'

NRN has told The Economic Times that large severance payments to departing employees (particularly ex-CFO Rajiv Bansal) perhaps constitute 'hush money'. He wonders if the company is suppressing some information harmful to the company. He also doubts the Board's compliance with its fiduciary responsibility. Pretty strong words indeed.

Murthy has sought some changes in the Board. He wants the Chairman, Seshasayee to admit his and Board's mistake in allowing large severance payments, to 'show contrition' for the same and get back to the straight and narrow path of corporate governance. He has once again expressed his oft-stated corporate governance mantra: "When in doubt, disclose. Let good news take the stairs and bad news the escalator."

He has also bemoaned the disparity (2000 : 1) in remuneration to CEO and entry-level software engineer in Infosys. It is anybody's guess how long Vishal Sikka will stick to Infosys. The company has issued a statement confirming the Board's full confidence in the leadership of Seshasayee and Sikka. Employees of Infosys are overwhelmingly supportive of Murthy just as the Tata employees are in favour of Ratan Tata.

It now appears that the promoters are more against Seshasayee than Sikka. What could be the reason? Sikka bows down to NRN and touches his feet in typical north Indian style. Seshasayee does not do this.

Mohandas Pai says there must be a TV channel discussion between NRN and Seshasayee where NRN will raise questions to be answered by Seshasayee. According to Pai, this is what transparency is about. He has mistaken public trial for transparency.

Balakrishnan , another promoter, wants Seshasayee to resign forthwith. Pai regrets that neither he nor Balakrishnan was paid severance payment when they resigned as CFO and therefore where is the need to pay Rajiv Bansal ? (In other words, the promoters expect the professionals to continue to do what the promoters did. Where then is the need for professionalisation?) He has criticised Seshasayee's argument that the severance money is a protection against Bansal exploiting the information about Infosys by joining competitors.(Seshasayee should have been more diplomatic and obfuscatory.)

There is a risk that overly possessive promoters may end up as demoters of their own creation. NRN cannot simultaneously claim credit for 'walking away' from his company and still keep frustrating his successor. He cannot have the cake and eat it too.

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.

Exiting with grace

Once one's time is up, one should quit gracefully. This is a time-tested principle that ensures that one's reputation is intact. Adherence to this principle is often an indication of professionalism. Non-compliance arises from unrealistic self-images.

No one can deny that Narayana Murthy contributed in a big way to the success of Infosys 1.0 However, his second incarnation in the company was an avoidable mishap. In particular, his utterances while severing his connections with the company (save of course his share-holding) are difficult to justify.

In his farewell address, he claimed that he had completed his twin mandate of setting things right at the company and of helping find a new CEO. Is Infosys better off today than when Murthy made his second entry? How many top-level executives have departed in the meanwhile? Is this his vision of setting the company right? Is he not merely trying to justify what he has done or more precisely what he has failed to do in the last one year?

He defended his decision to let go employees emphasising that 'some of them were low performers'. This defence is inappropriate at two levels. One, he did not let them go. Rather, they chose to leave. It is despotic to imagine that they needed his permission to depart. The Board should introspect why managers left in droves. Secondly, accusing the departees of 'poor performance' is sour-grapeism.

Murthy also spoke of his bold initiatives that will help the company in the long term. A person of his caliber and achievements can afford to boast less. He praised  his son as the author of his recent moves. If Rohan Murthy has indeed played such a prominent role in management, this is contrary to what was assured when Murthy brought his son along.

Infosys: Outsider at the helm

Infosys has a new CEO. Vishal Sikka, 47, a former board member of SAP AG, has the onerous responsibility of restoring the image and business of Infosys.

CEOs can be from the promoters, company employees or outsiders. After experimenting with the promoters so far, the company is now gambling on an outsider. Sikka's domain credentials are robust. For a CEO, emotional intelligence is as important as domain expertise. Would the new CEO fare well on the emotional parameter also?

Sikka says that N R Narayana Murthy posed a math puzzle to him and the latter was delighted by the prompt solution proffered by Sikka. One hopes this is not the only criterion for selection.

Murthy is moving out of the company. His emeritus chairmanship, according to him, is only a sinecure arising from company's gratitude for his past services. His son also moves out.

The share price has moved favourably. Is this a response to Sikka's entry or Murthy's exit?

Crisis in Infosys

N.R.Narayana Murthy must be a worried man. Since he rejoined Infosys as its Executive Chairman, scores of top managers have left the company. NRN is not known to accept such departures with equanimity. He is similar to A.M.Naik of L & T in this regard.

Did Murthy make a mistake in coming back to the company? He had earlier thanked persons like K.V.Kamath, V.Balakrishnan, Mohandas Pai and others for their role in his comeback. He may be cursing them now.

An aura of indispensability was built around Murthy. He succumbed with ease. He came in with his son, in utter disregard for canons of corporate governance for which he was a notable votary earlier. Top executives in the company paranoiacally saw ulterior designs in Murthy's second avatar as Chairman with his son in tow. The more he tried to convince others about his sincerity, the more suspicious they became. Murthy is not Steve Jobs.

Managerial leaders do not thrive in an atmosphere of suspicion. So many of them started leaving. In the normal course, the managers who continue in the company should feel a little more assured of promotion prospects because of top level vacancy. But this is not happening.

 The hunt for a new CEO to replace Shibulal is also taking its toll. Shibulal has been an unwilling CEO. Infosys has many talented executives who will be capable CEOs. Looking outside for leadership is a typical 'musk deer complex'. There are attempts to snare Nandan Nilekani into management again. NN rejoining Infosys will not be good either for him or for the company. He has become too political to guide the company objectively. The company should cease obsessing with promoters.

Management literature is replete with examples of outsiders doing poorly as CEOs. Infosys is preparing to provide one more example. Murthy is on a mission to tarnish his own legacy.