Murthy looking to promote 'internal candidate' to CEO

Infy board member V Balakrishnan most favoured for post, say sources

With the return of co-founder and mentor N R Narayana Murthy as the executive chairman, the buzz around information technology services company Infosys promoting an internal candidate to chief executive is getting louder.

Among the two favoured, the prospects of V Balakrishnan, a board member, look brighter. The company has started planning for grooming a strong line of leadership.

Sources in the company and outside said Murthy, in his second stint, had started the process of identifying internal candidates to groom for leadership posts. Immediately after his re-entry, Murthy is understood to have identified 10 to 15 executives, 30-40 years of age. “We do not comment on queries pertaining to our internal organisation,” said a spokesperson in reply to an email.

The sources said all those selected would be exposed to diverse roles. “One reason why the company approached Murthy with the proposal to come back is the management was not able to move ahead with the succession planning, a key role the then chairman, K V Kamath, was entrusted with,” said sources in the sector. “Murthy has always been a great believer of the capability of the internal candidates, and the company felt he would be the ideal person to finish this unfinished agenda he had handed over when he retired two years ago.”

Before his retirement in August 2011, Murthy is supposed to have identified three internal candidates for the top post — Ashok Vemuri, V Balakrishnan and B G Srinivas. In a statement last week after Vemuri’s decision to leave, Murthy had given enough hints that he did not have anybody else in mind other than these three internal names. He had also indicated that the probability of the senior executives of being the CEO was about equal.

The company is now left with Balakrishnan and Srinivas. The latter is head of Infosys Europe and of the banking, financial services and insurance business. Balakrishnan is one of the earliest of the existing management team to have joined Infosys (in 1991). He’s also known within the company for proximity to Murthy. In October 2012, when he stepped down as chief financial officer, triggering speculation that it might lead to his exit, Murthy, the chairman emeritus then, had come out in his support.

“I have no doubt at all that the Nominations Committee will look at him (Balakrishnan) at the time when they have to choose the next CEO,” Murthy had said in an email statement.

After stepping down as CFO, Balakrishnan headed Infosys’ India business unit, Finacle, and the business processing outsouring operations. These were widely viewed as the company’s effort to expose him to the operational side of the business. Around the time when Murthy returned to Infosys this June, Balakrishnan was given an additional responsibility as the chairman of Lodestone, a Switzerland-based management consultancy firm the company acquired in September last year.

“Bala is a much stronger contender now for becoming the next CEO, as he is the person who has spent the longest time at the company,” said an analyst. “If you see historically, under circumstances where the abilities of two candidates are equal, longevity is always given preference at Infosys. The other contender for the CEO's post (B G Srinivas) has spent much less time at the company.”