Current CEO S D Shibulal seeks early retirement, co hires two firms to scour internal and external candidates
The candid admission by Infosys that its CEO and managing director, S D Shibulal, was seeking an "early retirement" from the Board of directors has fuelled speculation that the search for the new CEO is nearly over.
Almost a year before of his scheduled retirement in March next, Shibulal has requested that he be relieved on the date of the last board meeting on January 9, 2015, or when his successor is ready to assume office, whichever is earlier.
This means Infy may find Shibulal's successor soon, given that the search actually began more than six-eight months ago, industry experts said.
K V Kamath, independent lead director, Infosys and chairman, ICICI Bank, said in an emailed response to dna, "Mr. Shibulal was due to retire in March 2015. As the last board meeting prior to his scheduled retirement date is on January 9, 2015, Shibu has offered to step down from the date of the last board meeting prior to his scheduled retirement or earlier if we were to complete the search and appointment process before that date. This is routine and I believe (this is) how successions happen."
The company on Friday said the nominations committee of its Board has begun the search to select the new CEO.
Kamath said it would take 6-8 months to find a successor, although industry experts said the new appointment may be announced within 3-5 months at the latest, given the already long search process.
The statement also mentions that the company will shortlist and evaluate an internal slate of candidates with the assistance of Development Dimensions International, a company specialising in corporate executive evaluations. It has also appointed Egon Zehnder, an executive search firm, to help the nominations committee in identifying an external slate of candidates.
Shibu's departure will mark the tenth senior exit at Infosys, which has seen a string of top management exits after the return of N R Narayana Murthy last June.
This will also be the first time in Infosys's history where a non-founder is set to become CEO (previous CEOs all being founder members including, NRN, Nandan Nilekani, Kris Gopalakrishnan and S D Shibulal) – and could also be the first time in its history that the CEO could be an external candidate.
This runs contrary to Infy's belief to promote internal candidates to top management positions, as current chairman NRN said there was a need to search for the best talent based on meritocracy– within or outside the company. However, market speculation has it that in case an external candidate is chosen, it may well be an ex-Infy senior management employee.
According to insiders as well as industry officials, Infy's two new presidents – UB Pravin Rao, head of global delivery and service innovation and B G Srinivas, head of global markets, are the most likely candidates internally for the CEO's post, after the exit of other CEO candidates in the running like V Balakrishnan, Ashok Vemuri and Chandrashekhar Kakal.
In case one of the presidents becomes CEO, a new president will have to be hired to replace him. However, Rohan Murty – son of NRN and current executive assistant to the chairman's office, is an unlikely successor to Shibu, at least till Infy's turnaround is complete, said an industry expert on condition of anonymity.
While it is unclear what Shibulal intends to do post retirement, a close Infy watcher and industry expert said, "Since Shibu is flush with funds, he may look at a start-up, following the footsteps of V Balakrishnan – ex-Infy CFO and BPO head. However, it is unlikely that he will join a rival IT firm at a higher post."
Shibulal has been widely speculated to step down from the role of CEO prior to his retirement, as it became clear that current executive chairman, Narayana Murthy – who returned from retirement last June - was unhappy with Infosys's performance under Shibulal, and said the company could have done a better job in executing Infosys 3.0 strategy.
According to another senior IT analyst, "While there is a good chance the new CEO could be an internal candidate, even an external candidate may be chosen based on familiarity with the organisation - like an ex-employee, besides providing dynamic leadership to the company, which has so far been lacking."
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