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| Edited By: |Source: DNA |Updated: Aug 19, 2017, 08:01 AM IST
It’s a clash of cultures, underscoring radically different perspectives vis-à-vis corporate governance, between the founding fathers and the current management at Infosys. That’s one way to analyse the resignation of Vishal Sikka, the CEO and Managing Director of the company. Though analysts say that Sikka’s stepping down had been in the making for some time now, the suddenness of the move had sent the company’s stock prices plummeting on Friday — it lost around Rs 17,200 crore in market capitalisation.
The tell-tale signs, which Sikka refers to in his resignation letter as the “continuous drumbeat of distractions and negativity”, were evident in the public sphere as well. It was, after all, a tug-of-war between co-founder NR Narayana Murthy and Sikka, resulting in the latter’s defeat at a time when the Board is to meet on Saturday to consider the proposed Rs 13,000 crore buyback programme. Murthy had been vocal about his displeasure over Sikka’s style of functioning.
The former’s continued emphasis on transparency, fairness, and accountability was a thinly-veiled dig at the CEO. In an unflinching show of support to Sikka on Friday, the Board opined that “Mr Murthy’s campaign against the Board and the Company has had the unfortunate effect to undermine the Company’s efforts to transform itself.” Sikka had joined the company three years ago to bring about, in his words, a “transformation in the culture, from a cost-oriented value delivery to entrepreneurship-oriented value delivery”.
After the initial honeymoon period, it has been a series of ups and downs both for India’s second-largest IT services firm and its helmsman. Global headwinds, manifested in Brexit and US President Donald Trump’s proposed H-1B visa restrictions, coupled with a pronounced shift towards Artificial Intelligence, Robotics and IoT continue to endanger Indian IT sector. What compounded the problem for Infosys was the not-so-profitable $200-million acquisition of an Israeli software company under Sikka’s stewardship that drove the wedge deeper between him and Murthy.
The differences can be magnified, but was Sikka on the right path in terms of preparing Infosys for the much larger global battle? Could it be that Murthy feared his own legacy would be undermined if Sikka succeeded in his ambitions? Another prestigious corporate house, the Tatas, suffered a similar crisis with Cyrus Mistry shunted out and Ratan Tata assuming the reigns again. Perhaps, there is an element of truth about the anxiety of entrepreneurs unable to come to terms with their retirement, forced to watch from the sidelines what they had painstakingly built being dismantled to make way for something new.
