Goal is to maintain stability between Infosys founders and company: Nilekani

BENGALURU: Nandan Nilekani expects to remain as non-executive chairman of Infosys as long “as necessary”, while he leads the company — that he helped cofound three decades ago — back to stability after months of wrangling over charges of corporate governance resulting in the exit of CEO Vishal Sikka.

Nilekani, 62, who spoke to reporters in Bengaluru on Friday, his first day at the helm of the company, listed the search for a new CEO, a long-term governance plan and review of the company’s relationship with NR Narayana Murthy, who has levelled charges of corporate governance lapses against the company, as priorities.

“My immediate goal is to bring stability and calm in the organisation,” said Nilekani, who left Infosys in 2009 to build Aadhaar, India’s unique identification number for citizens. He was at pains to clarify that he was not just at Infosys to take control as one of the founders.

“I am here representing the full board and 100% of shareholders. I have spent a lot of my time in consensus building in situations where there are different interests and trying to align them,” he said. At a board meeting on Friday, Infosys appointed Egon Zehnder to spearhead its search for a CEO.

Kiran Mazumdar-Shaw, chairman of Biocon and Infosys independent director, will lead the nomination and remuneration committee.

Nilekani was clear that he would spend most of his time on crafting Infosys’ future and begin by choosing a new chief executive. “I am sure we will have a wide pool of internal and external candidates. We will also look at Infosys alumni who have done well for themselves in the external world, who have gone on to become CEOs at other companies.”

There are just a small handful of such former executives — BG Srinivas, group managing director of Hong Kong telecommunications services provider PCCW; Sanjay Jalona, CEO of L&T Infotech; and Ashok Vemuri, CEO of Conduent. A review of the investigations into past governance lapses was also on his agenda, Nilekani told reporters while avoiding specific questions on the role of cofounders in the recent battle with the board of the company.

Murthy had been combative in recent months while castigating the company for issues ranging from what he regarded as an oversized severance package made to former CFO Rajiv Bansal and terms of acquisition of Israeli software company Panaya.

“My second goal is to reduce the media interest in Infosys, third goal is to immediately start the search for a CEO, which has already been done. The fourth goal is to come out with the long-term governance structure of the board, for which we have taken initiatives. The fifth goal is to talk about the relationship with Murthy,” Nilekani said.


The company also released a formal statement aimed at smoothening the tensions with its septuagenarian founder. “The board believes it to be unfortunate that various differences of opinion have arisen between Murthy and the board in the recent past. The board wishes to express that it was not its intention to cause Murthy or any other affected person any personal distress or anguish,” the statement said.

This was a far cry from the statement last Friday when the then board of directors chaired by R Seshasayee, said Murthy was threatening them with negative media coverage if they didn’t bow to his views.

“While the board and the company are focussed on the future, consistent with good governance, the new chairman will get a full briefing on these investigations and an appropriate course of action will be determined,” Infosys said in the statement released on Thursday. ‘NEED SOME TIME’ Nilekani said he would be calm and dispassionate in reviewing the investigations.

“I need some time. I will meet the people who have done the investigation and then we will take a decision in a fair and open manner,” Nilekani adding that the time frame for the review is something that would be left to the board. “The appropriate time means appropriate time… You should leave that to the board, please,” he said indicating the stance likely to be adopted by the new nonexecutive chairman.

He declined to answer questions on whether his personal connection with Murthy would be key in keeping the 71-year-old founder happy, even if the company does not make the Panaya investigation report public. Nilekani faced a barrage of tough questions, from analysts on a conference call organised for international investors.

“If the further briefing on investigations show no wrongdoing, then the recent disruptions may not have had a strong enough reason to start with. On the other hand, if you do find wrongdoing, it would raise fears that Murthy was privy to more information than others. Both are not comfortable situations. How do you propose to put in a system for the long term so that such discussions do not occur again?”

Abhiram Eleswarapu, analyst with BNP Paribas, asked Nilekani. Nilekani replied that he would not “get into a speculative conversation” on what he will discover and what is the appropriate action after that, stating that it was “too much into the future”. “But if one of my learnings is that there are systemic things that need to be done, then we will do those systemic things,” he said.

Infosys said the nomination and remuneration committee will deliberate on long-term go- vernance structures and present its recommendations in October. Simultaneously with Nilekani’s return, chairman Seshasayee, Sikka — who expected to stay on as executive vice-chairman — and independent directors Jeffrey Lehman and John Etchemendy stepped down from the board.

He said investors would have to wait until October to get more details about the company’s strategy but that a committee would be set up to review the strategy that Sikka had put in place.

“We have a committee of directors. We have Pravin (Rao) who is the interim CEO and Deepak Padaki who is the head of strategy. We will form a small group to set the strategic alignment of the company,” Nilekani said. He said the strategy review would begin to take place before the CEO appointment, though the incoming CEO would also be able to tweak the strategy.

“The strategy is not set in stone,” he said. He also calmed fears that Sikka’s abrupt departure would cause issues for clients. “A lot of the customers have been with us since I was at the company. So those contacts and relationships remain. And if any client feels uncomfortable, of course I will talk to them,” Nilekani said.