Institutional EYE

Commentary on Corporate Governance Issues

Who does Narayana Murthy speak for?

Narayana Murthy’s public criticism may not necessarily represent that of the Infosys’ entire promoter group. IiAS believes the voting pattern of promoters’ shares in resolutions presented by the company over the past 36 months is unmistakable evidence of an internal difference of opinion. Since Vishal Sikka’s appointment on the Infosys board, the company has had one extra-ordinary general meeting (- in which Vishal Sikka was appointed), three annual general meetings and has approached shareholders five times through a postal ballot. The voting data from IiAS Adrian in the table shows that the founders have never voted against any resolution. In case they do not acquiesce with what the manage

Is the Infosys board right in blaming Narayana Murthy?

Mr Naryana Murthy has had an unprecedented impact on India’s Information Technology (IT) sector: he fashioned the Global Delivery Model for IT services outsourcing from India and in doing so established Infosys as an iconic Indian company of its time. The build-up Narayana Murthy served as Infosys’ ceo from 1981 to 2002, and as its chairman from 2002 to 2011, and again for 17 odd months from June 2013. It was during Mr Murthy’s short second term that Vishal Sikka was brought in as the CEO. The first few sundrenched quarters – they usually are, saw the promoter group enchasing some of their shares, which had run-up some 20% since Sikka came on board. It was only after that that differences wi

Infosys: War and Peace

Vishal Sikka’s resignation cannot come as a surprise. Despite best efforts, Infosys’ board was unable to protect him from the constant onslaught of Infosys’ highly-statured, yet petulant, critics. IiAS believes that to put the company back on strong footing, Nandan Nilekani needs to be brought back, as the Non-Executive Chairperson: he has the stature and gravitas to fit the pieces together. Vishal Sikka’s resignation was expected. Most talented professionals will weigh where their time is being spent and if that is indeed worth it. Public comments from Narayana Murthy, with some of the other ex-employees joining-in on the chorus, have been distracting. The board, and Vishal Sikka, have spen

Defaulting on debt - and disclosures

The Securities and Exchange Boards (SEBI) circular of August 4 asking companies to disclosure delays/defaults addresses a number of issues simultaneously. But that SEBI needs to ask companies to do so itself speaks about the perfidiousness of companies. If regulators are over-prescriptive or corporates are burdened with excessive disclosure, they only need to look within their own. SEBI, for long, focussed on principles-based regulations. In the same spirit, its Listing Obligations and Disclosure Requirements Regulations of 2016, expected companies to disclose material information and events to the stock exchanges. While not being over prescriptive, this was expected this to mean: (a) The

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