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BW Exclusive: Respect From Stakeholders Must Be Corporates’ Top Priority, Says Narayana Murthy

Self-reliance should be defined as “earning enough global currency to import whatever is needed for the welfare of the nation,” says Infosys Founder

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Infosys founder N R Narayana Murthy feels that India has now got respect in the international community, and “it’s for the youth to build and consolidate on it”. The former Infosys Chairman, and one of the most distinguished -- and decorated – leaders to have been produced by India Inc, says that for any corporate, “respect form all stakeholders must top their vision statement and agenda”.

Murthy says that corporate governance is about “maximising shareholder value while ensuring fairness, transparency, and accountability to every stakeholder”. Murthy was speaking to BW Businessworld, in an exclusive interview. “Performance leads to recognition; recognition leads to respect; and, respect leads to power,” he said, in response to a question.

Under Murthy, Infosys came to be widely acknowledged (in India and outside) for its cutting-edge innovation, entrepreneurial genius and best practices -- a legacy that was ably carried forward by successor Nandan Nilekani. “My fervent plea to all the corporate leaders in this country and elsewhere is that they should put respect from the stakeholders as their top line in their top priority,” he said. Infosys has been named as the “Most Respected Company” in BW Businessworld’s rankings thrice.

While the world may be witnessing increasing protectionism and a new thrust on de-globalisation, Murthy has an interesting take on self-reliance. He said: “Thanks to (former US) President Trump, nationalism is more important that globalization. Following that, every nation started saying, ‘we'll first look after ourselves and then other country’…  I would say that self-reliance should be defined as ‘earning enough global currency to import whatever is needed for the welfare of our nation’. Self-reliance is not saying that we'll close our doors to imports. We should encourage our entrepreneurs and companies to export enough so that we have enough foreign exchange surplus to buy whatever best we want for our people in this country still and still have some money left in our pocket. That, to me is, self-reliance”.

He added: “Liberalization was perhaps the most impactful event (for Indian enterprises). It's very difficult for me to remember anything more impactful.”

In response to another question in the current context, he said: “I (have) also learnt that corporate governance is about maximizing shareholder value while ensuring, fairness, transparency, and accountability to every stakeholder: that is customers, employees, investors, vendor partners, government of the land, and the society.”

Talking about India’s economic potential and the global order, the Infosys founder said: “…For the first time in 300 years, India has got some respect in the international arena that it is the responsibility of youngsters to consolidate that respect into even bigger respect. And that can only happen by performance. As I said earlier, performance leads to recognition.  Recognition needs to respect and respect leads to power. Therefore, if we all want India to be a powerful nation, first it has to achieve economically.”

Murthy swears by compassionate capitalism, an idea he first talked about in 1974. “Compassionate capitalism is about capitalism in mind, liberalism and socialism at heart. It means the leaders of capitalism must ensure that the lowest-level employees’ welfare is first looked at before they start looking at their own welfare,” he explained, adding: “you have to become a friend of the commons, a friend of the society”.

There may be a debate on the private sector contributing to job creation, but Murthy said it must be properly contextualised. “No company should say that ‘our objective is to create employment’. What one should say, instead, is ‘our objective is to become much bigger in revenues, profitability and succeed in the marketplace’. If we did that, then we will automatically create lots and lots of high quality jobs,” he explained.

Murthy counts Mahatma Gandhi as his biggest influence. His mother, and many teachers have had a huge influence on him. His wife, Sudha Murty, an acclaimed author, educator and philanthropist is a pillar of strength to him. Murthy was offered by former Prime Minister Atal Bihari Vajpayee to become country’s IT Minister in 1999 – an offer he politely declined.

Murthy’s parting shot: “When we become high-quality citizens, then only we have the right to demand high quality services. So my request to our citizens is to learn from the examples of other developed countries, and become high-quality model citizens of this country, and then we can criticize others. That is most important”.

(full transcript of the interview to follow)

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narayana murthy magazine 25 March 2023