In an unexpected twist in the ongoing battle at the India's second-largest software outsourcing company Infosys, NR Narayana Murthy, the founding member of the company, has called off the battle with the board, saying R Seshasayee, the chairman, has 'the highest integrity'. Later in an interview to CNBC-TV18, however, Murthy also maintained that he has not withdrawn the corporate governance concerns he has raised.
The rift between founders of the company and its board spilled out in the open on Friday with Murthy questioning executive compensation and corporate governance at India's second biggest software services exporter led by Vishal Sikka. Sikka is the first non-founder CEO of the company.
"I have not withdrawn my concern," said Murthy adding concerns have to be addressed properly by the board.
He also said the board comprises of good intentioned people, but even good people sometimes make mistakes, and this is one such case.
Explaining further, Murthy said good leadership demands listening to all concerned shareholders, and hoped the board would take corrective actions soon and improve corporate governance standards.
Earlier, raising the corporate governance concerns he had clarified that it was not the management that concerns him.
"I think we are quite happy with (CEO) Vishal Sikka. He is doing a good job. However, what concerns some of us particularly the founders, and seniors, former Infoscions is that there have been certain acts of governance that could have been better," Murthy said. This comment meant his governance concerns were more about the board and chairman Seshasayee's actions.
Murthy, along with other co-founders Nandan Nilekani and S Gopalakrishnan had written to the Infosys board asking why Sikka's compensation was raised and hefty severance packages offered to two top-level executives who quit the company.
Sikka was paid Rs 48.7 crore in base salary, bonus and benefits last year as compared to base salary of Rs 4.5 crore for a partial period in 2015.
The co-founders also questioned "paying the former CFO (Rajiv Bansal) a 30-month severance pay which amounted to Rs 23 crore."
Most importantly, Murthy had questioned the chairman and independent director Jeffrey Lehman, and raised concerns over corporate governance.
The comments come just ahead of the Infosys board's press conference today late evening. The board members were expected to clarify on various governance issues raised by the founders.
Since the two-way battle between the promoters on one side and the CEO-board combine began last week, there were speculation that the chairman of board may have to step down in the near term. However, R Seshasayee has clarified that the board has full confidence in my leadership.
In an interview with The Economic Times, Seshasayee said, "The shareholders elected me to the board, and the board sees no reason whatsoever for me to step down."
"Whatever decisions that have been taken are collectively taken by the board. I have been given a job to do and I intend doing it conscientiously," Seshasayee said in an interview to ET.
On being alleged by another founding member T V Mohandas Pai that board didn't engage with the members on some decisions, Seshasayee called the development untrue, and said several conversations were made with the founders over the past one year with the latest being as late as January 2017.
With regards to decision taken over the severence package paid to Rajiv Bansal, Sesshasayee said the board had explained the decision to the founders several times, and in fact, the board has paid just Rs 5.2 crore, while suspending the remaining payments.
However, the board chairman raised concerns that the ongoing battle of words between the promoters and the board could have some impact on the employees morale.
With inputs from PTI
Updated Date: Feb 13, 2017 11:43 AM