Back to the future: Murthy return raises governance questions

By calling back NR Narayana Murthy, Infosys has embraced practicality and eschewed some of the principles that had lifted the company to the high pedestal of corporate governance, says Shriram Subramanian, managing director of InGovern, a proxy advisory services firm.

In an article in the Economic Times today, Subramanian, who is also a former Infosys staff, has said that the company was one of the few Indian firms with an independent chairman for the board and a retirement age for executive directors. The return of Murthy has thrown these principles out of the window.

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Until now, the company had a policy of not allowing founders’ children to take up executive role in it. With the appointment of Rohan Murty as executive assistant to Narayana Murthy, this governance philosophy has also been turned upside down.

Subramanian fears “the culture of acquiescence and servility to the founder chairman may breed a culture of yes-men”.

The move also highlights the board’s failure in finding an effective leadership both inside and outside the company.

Echoing the view is K Ramachandran, a professor with Indian School of Business.

“The founder coming back is not a great idea because it means the company did not have the right mix of leadership skills to run the company,” he has been quoted as saying in a report in the ET Magazine.

According to him, the board had witnessed the troubles the present leadership is facing and must have intervened earlier.

Subramanian’s article also raises one more pertinent question: How can it help clients if it is building tomorrow’s Infosys with yesterday’s leaders?

Given Naryana Murthy’s enthusiasm to learn from Sachin Tendulkar , this doubt may not be misplaced.