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BW Businessworld

Infosys: War Of The Worlds

Was it only a clash of personalities or were there other more complicated angles to the entire controversy?

Photo Credit : Bivash Banerjee

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For every management and engineering graduate, Infosys holds key lessons. Going by the recent events, it seems the Sikka-Murthy controversy is set to top the charts of controversial corporate cases in India. On one hand, was a media savvy, new-age, Vishal Sikka and on the other, the traditionalist, semi-modern blend of N.R. Narayana Murthy. Both sides had been playing ping-pong of allegations when finally, Sikka, of his own accord, resigned as the CEO of India’s 2nd largest IT services company on 18 August.

Was it only a clash of personalities or were there other more complicated angles to the entire controversy? Those who have been following the events closely will know that initially it seemed as if it was just Sikka and Murthy’s egos at play. However, as the case matured, the facts started revealing different angles of the fiasco.

Coming from my own experience in the industry, I support the theory that this fiasco was not just another fallout, but may be a very well-planned move by the promoters of Infosys. Putting things in perspective, it could be that Sikka’s resignation was instigated in order to move the company’s share price much lower to the position it held, hence giving an easy buyback option to the promoters of the company. It is worth mentioning here that the founders were looking for a buyback option since long, and Sikka’s resignation has probably become the perfect recipe to carry out the deed.

However, I would also want to take a morenon-contrarian and less controversial view on this debacle — which is calling it a ‘debacle’, literally meaning a ‘disastrous failure’. And indeed, it all now looks like a mammoth failure on part of the Board to shield Sikka from Murthy and his team; failure on part of Sikka for not having confronted the promoters diplomatically and, of course, failure on part of Murthy for having put his own baby in crisis. All of this points to a debacle. Going by this theory, it also seems that everything that Infosys is going through might indeed bode well for the company as it has paved way for a total overhaul. Still, there is no mistaking that the main culprit here is the company’s Board, which chose to ignore the signs of distress.

Of course, the fallout led the Board to back Sikka since the numbers were in the latter’s favour. I suppose this must also serve as a reason for the entire Board to resign and hold itself responsible for what happened at the helm of affairs.

While either of the above might be true, one thing is sure to stand in good stead, Sikka’s strong media image. He has been for long riding the wave of an impressive media image. And why not? He was the one behind Infosys improved numbers. Still, a respectable image reported by the media cannot become a parameter to judge one’s effectiveness as a leader. Take for example, the severance package issue of Rajiv Bansal, company’s former CFO, or the accusations over Panaya’s acquisition. Despite the disapproval of the founders, led by Murthy, the company still went ahead with both the decisions. This led Murthy to raise doubts over the lack of efficient governance and he went all out in his explosive letters to the Board.

In this chaotic scheme of things though, there is an important learning for all the other companies — to understand the importance of ethics and culture; how the basic pillars of foundation of a company need to be strong to avoid an Infosys in the future. Hence, just like every other disaster, Infosys also serves as a learning.

True, the war is still on and the wounds are raw. And all parties are grieving one way or the other. But it could be too late for the Board to salvage this situation. For the Board, as their role as gatekeepers to good governance, should have ensured that things didn’t come to such a pass. They should have ensured that the warring parties toed the line — they would have thus performed their primary duty towards the company.

The author is editor-in-chief of BW Businessworld


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