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With Infosys' first non-founder CEO Vishal Sikka calling it quits, an investor advisory firm today favoured Nandan Nilekani -- one of the most high-profile founders of the IT firm -- being brought back on its board as its non-executive chairman.
The Institutional Investor Advisory Services (IiAS) said the Infosys board has been "unable to protect its CEO" and to select a successor it must begin by "reinventing itself".
"It must convince Nandan Nilekani to join the board once again, as its Non-Executive Chairperson," it said in a report, while adding that Nilekani should not see this as any other corporate job as Infosys is at the heart of Indian IT and its success will foretell how the sector will position itself for the future.
Nilekani was one of the seven founders that set up Infosys more than three decades ago and served as its CEO between March 2002 to April 2007.
Sikka was brought in as the company's first non-founder CEO in June 2014, prior to which the position was held by one or the other founder.
Corporate governance experts and market analysts blamed the recent spat between Infosys founders and management for the resignation.
The board and Vishal Sikka have spent considerable amount of time addressing the concerns - to a point where the company, in its 20-F filing, disclosed distractions from 'activist shareholders' as a possible risk to achieving the company's strategic goals, the report said.
According to IiAS, Nandan Nilekani is possibly the very best candidate Infosys can find globally.
"He has kept pace with technology advances, has been instrumental in digitalising the country, and is well- networked with the bureaucracy and global leaders. He also has skin in the game: having started with Infosys early in its journey, Nandan Nilekani will intuitively understand the corporate culture, and as such also have 'matching of minds' with some of Infosys' founders," it said adding he possesses the stature to bring an end to the public discourse.
Commenting on the development, V K Sharma, Head - PCG, HDFC securities said while Infosys did better than the industry during Sikka's tenure, it was no where near achieving Sikka's own USD 20 billion target by 2020.
"Sikka's allegation that he was continuously being distracted does not wash as he had long enough a honeymoon period to make his mark," Sharma said.
Market experts however believe that though this will be a near term dampener but going forward the stock will overcome the setback.
"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," Angel Broking VP Research- IT Sarabjit Kour Nangra said.
Mahesh Singhi, Founder & MD, Singhi Advisors also said, "the move is a succession plan to the company where Sikka comes on the board as vice chairman".