Nilekani begins tough task
Nandan Nilekani, newly appointed non-executive chairman of Infosys, started his first day in office with a great deal of gusto and goodwill, packing in a board meeting between two conference calls that were designed to soothe the concerns of investors and clients.
- Published 26.08.17
Bangalore, Aug. 25: Nandan Nilekani, newly appointed non-executive chairman of Infosys, started his first day in office with a great deal of gusto and goodwill, packing in a board meeting between two conference calls that were designed to soothe the concerns of investors and clients.
At the end of day, he looked frazzled and irritable after stonewalling a barrage of questions from reporters who wanted to know what role the promoters, especially founder N.R. Narayana Murthy, would play in the future.
Another question was whether the gag order on outgoing CEO and managing director Vishal Sikka would effectively scupper Murthy's original demand to place the three investigation reports into the controversial Panaya buyout in 2015 in the public domain.
Nilekani attempted to play down the war of words between the board of directors and Murthy that eventually led to the exit of Sikka, former chairman R. Seshasayee and two overseas directors.
The move to bring about a rapprochement between Murthy -- whom Nilekani labelled as the father of corporate governance in India - and the board began with a feeble attempt at an apology for its statement on August 18 in which it slammed Murthy for unleashing a continuous assault on Sikka that became "the primary reason" for the CEO's dramatic decision to resign.
Exactly a week later, the company issued a statement in which it said: "The Board believes it to be unfortunate that various differences of opinion have arisen between Mr. Murthy and the Board in the recent past. The Board wishes to express that it was not its intention to cause Mr. Murthy or any other affected person any personal distress or anguish while stating its point of view."
Nilekani stonewalled all questions based on allegations by promoters, mainly Murthy, and said: "I am not going to run this company based on Twitter and TV channels."
Nilekani also tried to gloss over the fact that almost everyone was conflicted in some way or the others: the founders themselves have spoken and voted very differently over resolutions that the board placed before the shareholders in the past year.
The new chairman said he wanted to start working on ways to build the future for the company. He said he intended to protect the interests of all the shareholders in the company - not just the founders - and lay out the new strategy plan for the company in October after various confabulations.
He said his first priority was to start the search for a new chief executive officer and then induct new members into the board of directors.
Nilekani said the company would scout for the new CEO "internally, externally and from the Infosys alumni - people who have gone or climbed to leadership positions in other companies".
"My biggest job as chairman is to ensure alignment between the board and all the shareholders, make sure that we bring down noise in the system and ensure everybody goes back to work to do what they have to do which will build a very strong Infosys," he said.
Nilekani said he would consult everyone with the ultimate goal of stabilising the company. "This will be a very broad-based input taking process," he said.
He refused to make any commitment on placing the investigation reports into the Panaya deal in the public domain. He intended to seek a full briefing on these investigations and only then decide on the appropriate course of action.
The investigation into the deal began with whistleblower complaints to the market watchdog Sebi last February that accused Sikka of benefiting financialy in some way from the $200-million buyout.
Sikka told a television channel from his home in Palo Alto, California, that he had not seen the severance agreement drawn up with the company that carried a "non-disparagement agreement".
Sikka tried to brush aside the use of that phrase, terming it as a standard clause in such agreements. "It just means that we won't say bad things about each other," Sikka said, adding that it was just something that keeps lawyers in business.
The company has flip-flopped on Sikka's severance package. When he resigned last week, then chairman Seshasayee had said that he would not be entitled to get any benefits. Instead, he was asked to stay on as an executive vice chairman on an annual salary of $1 till March next year or earlier if his successor was found.
On Thursday, the company restored his severance package but put a virtual gag order on him.
Companies like Infosys spell out the severance package terms when they appoint a key official. The standard procedure provides for a payout for separation for good cause - which ranges from a better career offer to disability or death. No severance benefits are paid when the resignation is without good cause, which usually refers to misdeeds or an act that brings disrepute to the company.
If Infosys is now ready to pay Sikka his severance package, it means that his resignation is with good cause. In which case, what was the fuss all about?