Vishal Sikka fell victim to Board versus founders battle

What began as a tiff between the Infosys Board chaired by R Seshasayee and its founders led by N Narayana Murthy culminated on Friday in the resignation of the IT bellwether’s CEO and managing director, Vishal Sikka.    

Many reasons have been attributed to the three-way clash between the Board, promoters and the management, which has been widely talked about over the past one year. These range from corporate governance issues and ego clashes to communication breakdown between peers and an acquisition gone sour. But what was it that compelled Sikka to call it quits?  

Kris Lakshmikant, founder chairman and managing director of The Head Hunters India who is also a shareholder of Infosys, revealed that the intended target of the Infy founders was Seshasayee but it was Sikka who got ensnared.  

“I came to know that the target is actually Sheshayee. They (founders) feel he (Seshasayee) is not being able to control Sikka. Murthy and Seshasayee don’t get along. In all this, Sikka has been caught,” he said. Turn to P7

Lakshmikant said Seshasayee’s term will get over in nine months. He did not fault Sikka’s performance during his tenure at the $10-billion IT company, the second largest in the country.  

“What Sikka has done is as good or as bad as the market (sic). TCS has performed as badly or as well as Infosys in the last three year but TCS CEO [N Chandra] has been promoted. He has been promoted as chairman of Tata Sons,” said the Infy shareholder, who feels it could also be an ego issue between Seshasayee and Murthy.

According to him, Murthy also felt that the acquisition of a company called Panaya at $200 million was a bit expensive.

Lakshmikant said the Infosys founder wanted to eat his cake and have it too and felt his extensive interference in the firm’s day-to-day operations could have led Sikka to call it a day: “Today, if you are the CEO (of Infosys) and you have to see Narayana Murthy every day and not the client, you can’t do your work properly.”

Ganesh Natarajan, executive chairman and founder of 5F World start-up, also told DNA that it all began with differences between the Board and the promoters, and the management “got dragged into it”.

“It started off with a clash between the Board and the promoters. I’m sure Sikka felt that he was accountable to the Board and not to anybody else. The Board and promoters had their battles, and promoters had direct problems with the management,” Natarajan said.  “Seshasayee is a thorough professional. As far as he is concerned, the promoters are no longer on the Board now and his responsibility is to the shareholders and the Board. That’s the way he has played. But the promoters wanted to have a say and so it is between them and the Board but unfortunately the management has also got dragged into it. It (resignation of Sikka) is a bit of an unfortunate circumstance,” he said.

Natarajan, too, believes the exiting CEO has done a good job over the last three years, but Murthy’s constant allegations went against him. Other than raising the issue of “abnormal” salary hikes, bonuses and increments for junior employees, Murthy also objected to Sikka’s charter flights and shifting of the head office to the US — all of which the outgoing CEO dubbed “distractions”.

“He (Sikka) must have found it (constant allegations) coming in the way of his own performance, his bonuses (and so) he must have thought he might as well move and do something else,” said Natarajan.  

The chief of the former IT lobby body, NASSCOM, also saw it as a breakdown of communication between peers.  

“Ultimately, it’s building relationship among peers but communication breakdown has been very visible since one year ago. That is clearly something that has to be fixed or corrected,” he said.