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Prahlad on Infosys board gets promoters to assert voice, says corporate governance expert

Some of the recent moves by the company like paying a hefty severance package to the outgoing CFO Rajiv Bansal did not go down well with the investors

Ayan Pramanik  |  Bengaluru 

Prahlad on Infosys board gets promoters to assert voice: Corp governance expert

Last week's decision by Ltd to appoint as a board member has riled experts, who have argued that it is an early sign of "promoters trying to assert their points in the governance" of the company.

"The regime of completely independent board at probably has not worked," Shriram Subramanian, founder and managing director of advisory and firm InGovern Research Services, said.

Prahlad, a former employee, is also related to the company's founder N R Narayana Murthy.

Subramanian says this move is an early sign of "promoters trying to assert their points in the governance" of India's second largest software exporter.

Since became the first non-founder chief executive, has seen board members who are outside of the six founders. Infosys's board currently has Sikka and U B Pravin Rao, chief operating officer, as executive members. Apart from Prahlad, other independent directors include R Seshasayee, Prof. Jeffrey S. Lehman, Prof. John W Etchemendy, Kiran Mazumdar-Shaw, Dr. Punita Kumar-Sinha, Ravi Venkatesan, and Roopa Kudva.

Subramanian is apprehensive of maintaining CEO and the independent board's precedence in decision making going forward. "We are not yet very clear of Prahlad's credentials to be in such a big role as one of the independent directors of a company like Infosys. CEO's value system may have diversions on many occasions in future," he said.

An industry expert looked at it as a "normal course of action" and said that "investors have nothing to be wary of". "Induction of as one of the independent directors on board is a normal course of action. I would call it a governance affair and not operational in nature," Rahul Tewari, Had, Technology Investment Banking, ICICI Securities.

"Prahlad's status as an independent director is fully in compliance with the relevant definition under the Companies Act," an spokesperson said. "To amplify, he is not a relative, nor is the relationship of Surya Software with the Company material, under the said definition."

Some of the recent moves by the company like proposal to pay a hefty severance package to the outgoing chief financial officer Rajiv Bansal, according to Subramanian, did not go down well with the investors. "There was no proper explanation to justify this decision," he said.

Prahlad is the founder and CEO of Surya Software Systems Pvt Ltd and does some work with the company on the banking and financial services vertical.

Former board member T V Mohandas Pai, however, says induction of Prahlad, who was his colleague at the company, is an "excellent move"."Prahlad is a senior technology professional and has a deep understanding of the business with intimate knowledge on product market. There is no breach of as Prahlad is a very distant relative of Murthy. Prahlad left in 1995 as a senior vice president. He could have 'practically been on the board of the company, had he stayed with the company," Pai added. 

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Prahlad on Infosys board gets promoters to assert voice, says corporate governance expert

Some of the recent moves by the company like paying a hefty severance package to the outgoing CFO Rajiv Bansal did not go down well with the investors

Some of the recent moves by the company like paying a hefty severance package to the outgoing CFO Rajiv Bansal did not go down well with the investors

Last week's decision by Ltd to appoint as a board member has riled experts, who have argued that it is an early sign of "promoters trying to assert their points in the governance" of the company.

"The regime of completely independent board at probably has not worked," Shriram Subramanian, founder and managing director of advisory and firm InGovern Research Services, said.

Prahlad, a former employee, is also related to the company's founder N R Narayana Murthy.

Subramanian says this move is an early sign of "promoters trying to assert their points in the governance" of India's second largest software exporter.

Since became the first non-founder chief executive, has seen board members who are outside of the six founders. Infosys's board currently has Sikka and U B Pravin Rao, chief operating officer, as executive members. Apart from Prahlad, other independent directors include R Seshasayee, Prof. Jeffrey S. Lehman, Prof. John W Etchemendy, Kiran Mazumdar-Shaw, Dr. Punita Kumar-Sinha, Ravi Venkatesan, and Roopa Kudva.

Subramanian is apprehensive of maintaining CEO and the independent board's precedence in decision making going forward. "We are not yet very clear of Prahlad's credentials to be in such a big role as one of the independent directors of a company like Infosys. CEO's value system may have diversions on many occasions in future," he said.

An industry expert looked at it as a "normal course of action" and said that "investors have nothing to be wary of". "Induction of as one of the independent directors on board is a normal course of action. I would call it a governance affair and not operational in nature," Rahul Tewari, Had, Technology Investment Banking, ICICI Securities.

"Prahlad's status as an independent director is fully in compliance with the relevant definition under the Companies Act," an spokesperson said. "To amplify, he is not a relative, nor is the relationship of Surya Software with the Company material, under the said definition."

Some of the recent moves by the company like proposal to pay a hefty severance package to the outgoing chief financial officer Rajiv Bansal, according to Subramanian, did not go down well with the investors. "There was no proper explanation to justify this decision," he said.

Prahlad is the founder and CEO of Surya Software Systems Pvt Ltd and does some work with the company on the banking and financial services vertical.

Former board member T V Mohandas Pai, however, says induction of Prahlad, who was his colleague at the company, is an "excellent move"."Prahlad is a senior technology professional and has a deep understanding of the business with intimate knowledge on product market. There is no breach of as Prahlad is a very distant relative of Murthy. Prahlad left in 1995 as a senior vice president. He could have 'practically been on the board of the company, had he stayed with the company," Pai added. 

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Business Standard
177 22

Prahlad on Infosys board gets promoters to assert voice, says corporate governance expert

Some of the recent moves by the company like paying a hefty severance package to the outgoing CFO Rajiv Bansal did not go down well with the investors

Last week's decision by Ltd to appoint as a board member has riled experts, who have argued that it is an early sign of "promoters trying to assert their points in the governance" of the company.

"The regime of completely independent board at probably has not worked," Shriram Subramanian, founder and managing director of advisory and firm InGovern Research Services, said.

Prahlad, a former employee, is also related to the company's founder N R Narayana Murthy.

Subramanian says this move is an early sign of "promoters trying to assert their points in the governance" of India's second largest software exporter.

Since became the first non-founder chief executive, has seen board members who are outside of the six founders. Infosys's board currently has Sikka and U B Pravin Rao, chief operating officer, as executive members. Apart from Prahlad, other independent directors include R Seshasayee, Prof. Jeffrey S. Lehman, Prof. John W Etchemendy, Kiran Mazumdar-Shaw, Dr. Punita Kumar-Sinha, Ravi Venkatesan, and Roopa Kudva.

Subramanian is apprehensive of maintaining CEO and the independent board's precedence in decision making going forward. "We are not yet very clear of Prahlad's credentials to be in such a big role as one of the independent directors of a company like Infosys. CEO's value system may have diversions on many occasions in future," he said.

An industry expert looked at it as a "normal course of action" and said that "investors have nothing to be wary of". "Induction of as one of the independent directors on board is a normal course of action. I would call it a governance affair and not operational in nature," Rahul Tewari, Had, Technology Investment Banking, ICICI Securities.

"Prahlad's status as an independent director is fully in compliance with the relevant definition under the Companies Act," an spokesperson said. "To amplify, he is not a relative, nor is the relationship of Surya Software with the Company material, under the said definition."

Some of the recent moves by the company like proposal to pay a hefty severance package to the outgoing chief financial officer Rajiv Bansal, according to Subramanian, did not go down well with the investors. "There was no proper explanation to justify this decision," he said.

Prahlad is the founder and CEO of Surya Software Systems Pvt Ltd and does some work with the company on the banking and financial services vertical.

Former board member T V Mohandas Pai, however, says induction of Prahlad, who was his colleague at the company, is an "excellent move"."Prahlad is a senior technology professional and has a deep understanding of the business with intimate knowledge on product market. There is no breach of as Prahlad is a very distant relative of Murthy. Prahlad left in 1995 as a senior vice president. He could have 'practically been on the board of the company, had he stayed with the company," Pai added. 

image
Business Standard
177 22