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Infosys Chairman must quit for lapses: Former CFO
Infosys Chairman must quit taking responsibility for the lapses in corporate governance and an interim chairman should address the concerns of shareholders, the software company’s former chief financial officer said.
“I think Chairman (R Seshasayee) should step down taking responsibility for all the lapses in the past. The Board should have an interim chairman and directly address the issues of the founders. That is the right thing to do,” says V Balakrishnan. “The Board and Chairman collectively need to take responsibility,” he added.
Clarifying that the issue was not between incumbent Infosys CEO Vishal Sikka and the founders, Balakrishnan said the latter have never interfered in the company’s business and operations. “These are issues not related to Sikka, but the Board. The founders brought in Sikka, gave him full freedom. Infosys Board has been a letdown as there have been corporate governance issues raised by the founders from time to time which they have not taken any effective steps to address,” Balakrishnan said.
However, he did not give a clean chit to Sikka, noting that since he was also a Board member, it was a collective responsibility. “They are not ordinary shareholders. They have built the company and they hold a large number of shares even today. They raised some governance issues. “The Board should directly engage with the largest shareholders and address all their concerns,” he added.
Observing that the Board appreciated and respected inputs from the founders, Infosys said it appointed Cyril Amarchand Mangaldas, corporate governance experts, to receive from promoters and other key stakeholders various inputs, evaluate them and make recommendations.
The Board cannot appoint a legal firm to come in between. That would be a joke, the former CFO said. “Communication channels were broken because the law firm was brought in to talk to the shareholders. That is a wrong approach.”
Balakrishnan said one of the issues was large severance payment made to ex-employees holding key positions. “For eg, severance payment was made to an ex-CFO. Initially there was no explanation why this payment was being made. Then vague explanations came. Then they stopped the payment. “When such a large payment is made to an ex-employee, naturally the perception is negative. Even today the Board has not addressed it,” he said.
Mazumdar-Shaw speaks out
Meanwhile, Infosys board member and Biocon Chairperson Kiran Mazumdar-Shaw asserted there has been no breach in corporate governance at the IT bellwether, but said there may be some “judgement calls” on which the board differed with the promoters.
Reacting to Infosys co-founder NR Narayana Murthy’s comments on governance standards, she said in future, the board would try to allay such concerns of promoters. She said the board is firmly behind Sikka. “There has been no breach in governance issues. Yes, there may be judgement calls on which we differ with the promoters, but I think over time we will try and see how we can allay these concerns that the promoters have in terms of the way the board conducts itself,” she told a section of media here.