Letters: Groupthink tendency

Recent developments in Infosys point to a general dysfunctional governance issue

With reference to Kavil Ramachandran’s article, “Time to come out of the long shadow” (February 22), recent developments in Infosys and those in Tata Group sometime back point to a general dysfunctional governance issue. 

In both the cases, the narrative has been that the board and/or the incumbent chief executive were found lacking in carrying out their responsibilities by the founder promoters, who themselves handed over these duties to the incumbents. Such allegations indicate a situation in which the governance mechanism has not been institutionalised properly. Otherwise, boards of the respective companies should have been able to exercise oversight well in time. This could be because of an individualistic approach in the running of the companies. 

So long as founder promoters of the stature of Ratan Tata and N R Narayana Murthy are at the helms of affairs, it is perceived that the bulk of the governance responsibilities is borne by them; boards get away with a minimalist approach. Founders often fail to put in place a robust governance mechanism, which, after their retirement, would carry their legacy with the requisite checks and balances.

Even when boards with independence and expertise are said to have been set up, they do not embody a well-oiled institutional process in their operation. More often than not, boards become a proxy for the powerful chairman or CEO. Such predilections make boards susceptible to groupthink.

Santanu Sarma Barua, Bhubaneswar

Letters can be mailed, faxed or e-mailed to: 

The Editor, Business Standard

Nehru House, 4 Bahadur Shah Zafar Marg 

New Delhi 110 002 

Fax: (011) 23720201  ·  E-mail: letters@bsmail.in

All letters must have a postal address and telephone number