Proxy firms recommend return of Nandan Nilekani on Infosys board

Move follows Vishal Sikka's stepping down as company's MD & CEO over 'personal attacks'

Proxy advisory firms have begun to endorse Nandan Nilekani for the top job at Infosys. According to one of the proxy firms, the company can be placed on a strong footing once again if Nilekani is brought back as the non-executive chairperson of Infosys.
 

The endorsement for Nilekani comes at a time when the Bengaluru-based technology major has begun evaluating both internal and external candidates as part of the CEO selection process, after the dramatic exit of Vishal Sikka on Friday.

Sikka said he preferred to quit the firm in lieu of the "personal attacks" being leveled against him.

According to the Institutional Investor Advisory Services (IiAS) report, Sikka's resignation does not come as a surprise. Despite best efforts, Infosys' board was unable to protect him from the constant onslaught of Infosys' highly-statured, yet petulant, critics.

The resignation brings Infosys back to square one as it begins its hunt for a new CEO once again. In its earlier search, the board concluded that several internal candidates were not suitable for the role. Given that the company needed to transform itself, getting someone from outside was indeed the right decision, IiAS opined.

"He (Nilekani) is possibly the best candidate Infosys can find globally. He has the stature and gravitas to fit the pieces together. He has kept pace with technology advances; has been instrumental in digitalising the country; and has a good network comprising the bureaucracy and global leaders," IiAS said.

Nilekani was one of the seven founders that set up Infosys more than three decades ago and served as its CEO between March 2002 and April 2007.

According to the proxy firm, Nilekani will intuitively understand the corporate culture, besides enabling smooth work with some of the like-minded founders of Infosys.

Retrospectively, proxy firms believe that the company's former founder Narayana Murthy's comments, along with the views of some other ex-employees, have been a constant distraction, leading to periodical disruptions for the company. Infosys' investor call also raises some important questions- Will a new leadership change direction for Infosys again?

"Uncertainty will continue as the differences between founders and the board continues," said InGovern MD, Shriram Subramanian.

"It is clear that the promoters found it difficult to let go. They were dogmatic and imposed their views and values on the company. As Indian companies undergo the transition from promoter-led to widely-held professional-led companies, this issue of "letting go" will take more prominence," added Subramanian.

From paying unjustified severance packages to top executives to the alleged wrongdoing in the acquisition of Panaya and Skava Systems, Sikka dealt some heavy charges on his reputation.

"Infosys under him has created doubts in the minds of people by choosing not to make investigation findings public. As the part of old corporate governance practice, a listed company should not keep such developments under the carpet," said J N Gupta, managing partner, Stakeholders Empowerment Services (SES).