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Freedom for CEOs: Is it a mirage at India Inc?

Can Infosys find a CEO who would be willing to join knowing that interference?

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Undignified comments, allegations of poor corporate governance, selective media leaks and continued inferences: phases that marked the aftermath of Vishal Sikka's sudden departure conjure up the images of another dark chapter of country's corporate world, the unceremonious exit of Cyrus Mistry as the head of the Tata Group.

Though not fully comparable, there are similarities between the two landmark events and corporate India would do well to learn the lessons from these two unfortunate happenings about how not to manage succession.

"I want the new CEO to chart his own path to create better glory for Infosys without any interference from the founders!" recollects an activist shareholder of Infosys co-founder Narayana Murthy's speech to shareholders in 2014.

"While he talked of giving full independence to incoming Vishal Sikka, his bitterness over exit of V Balakrishnan, one of the top contender to the post of chief executive officer, was palpable and jarring," the shareholder who travelled to Infosys AGM from Kolkata that year recalls.

Within a few years, those utterances of Murthy turned hollow and stakeholders of Infosys and other corporate bodies realised that independence of the Board in promoter-driven large companies still remains elusive.

"There is a streak of similarity (between the two episodes) but we must understand that while Mistry was a minority with the exception of his family which supporting him, Sikka had support from most. I see, on a similar line, a positivity of the whole thing which is that the boardroom battle that has been raging for some time is over right now. With this, there is an end to the distractions and the noise with Murthy himself now at the receiving end," V K Vijayakumar, chief investment strategist at Geojit Financial Services, told DNA Money.

What will be the fate of Infosys post the loss of its most prized lateral professional appointment? Can it find a CEO who would be willing to join knowing that interferences by former heads might continue to distract them?

"The new CEO might come in with his own set of terms saying I won't be tolerating anything like this," Vijayakumar said.

It's not just the former heads who are to be blamed, says VK Sharma of HDFC Securities.

"Sikka's allegation that he was continuously being distracted does not wash as he had long enough a honeymoon period to make his mark," he said.

While some see gloom and doom for lnfosys some believe it will be business as usual, very soon.

"For the brand Infosys, it will be business as usual. Large organisations discover themselves with growth. The induction of Sikka was a milestone on this path. His leaving is yet another milestone. And there sure will be many more milestones ahead," brand expert Harish Bijoor told DNA Money.

"While in near term, it's a setback for the company; but given the strength of the board of the company, we believe that the company will overcome the setback," Sarabjit Kour Nangra of Angel Broking said.

THE BIG QUESTION

  • Can Infosys find a CEO who would be willing to join knowing that interference?
     
  • Some see gloom and doom for lnfy, some believe it will be business as usual
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