Former Infosys CFO V Balakrishnan on Sunday said he favoured co-founder NR Narayana Murthy being invited as chairman-emeritus and chief mentor with immediate effect and allowed to take a lead to reconstitute the board to create a long-term and sustainable governance framework.
“I think it will be a good idea for the board to immediately invite Mr Murthy as chairman-emeritus and chief mentor... He should also take the lead in re-constituting the board to create a long-term, sustainable governance framework,” he told PTI. “The board needs an appropriate balance to create the checks and balances necessary to make the executive management accountable,” the former chief financial officer added.
His statement comes after co-chairman Ravi Venkatesan, in an interview to a business channel, had said the board would absolutely consider giving a formal role to Murthy if he so wished, but he has not obviously indicated anything to that effect.
Balakrishnan said the board should ‘shed its ego’, go beyond niceties expressed in public interactions and reach out to him and other founders directly for the shareholders to see any upside in their holdings, “as it is very important for the company to regain its leadership in governance and trust.”
“The friction between founders and the current board is impacting the company and is not good for its stakeholders. With Infosys stock languishing for almost three years without much upside is brutal to its shareholders,” he said.
Former Infosys chief financial officer Mohandas Pai had on August 11 had pitched for Murthy's return as Chairman Emeritus, saying the move would improve its brand and assure investors about adherence to high corporate governance standards. He had also pushed for nominating two new board members representing the founders, who still hold 13 per cent stake and classified as promoters, at the IT major to give “continuity” to the company.
Balakrishnan, however, said Murthy’s role is not a legal position, but that he can be the sounding board on all governance-related matters and also provide the needed trust and comfort to all stakeholders, besides ensuring protection of core values and culture, while the company transforms. "As a person coming from outside, he can take a fresh look at all the governance-related issues of last three years and bring them to their logical conclusions,” he stated. Murthy, however, had made it very clear he is not behind acquiring power or control, but wants core value system of the company to be protected and high governance standards maintained, Balakrishnan said.
There were several instances where a CEO had made a comeback to set things right — Apple, Starbucks and Google being great examples, he said. "Bill Gates continued on the board of Microsoft to maintain continuity. Mr. Murthy is very clear that he does not want to come back to run the company," he added. Balakrishnan said
Infosys was a "bellweather" company and a gold standard for corporate governance practices in the country, but in the last three years it had sadly lost its pre-eminence. "The company that used to command a high governance premium in the capital markets has totally lost that premium today," he said.