Infosys crisis: shift in culture or serious lapse in corporate governance?

Two major takeaways

There were two major takeaways from an hour-long press conference addressed by present chairman R Seshasayee and CEO Vishal Sikka.

1. The board accepted that there could have been a lapse on the issue of severance packages (because of subjectivity), but information was not hidden to silence anyone.

2. The darling of India's global success in the IT space is changing its values to adapt to the changing world.

Unanswered questions

However, despite repeated assurances that present board follows the best practice standards, questions remain unanswered.

- Why was the established process was not followed when Infosys severed its contract with CFO Rajiv Bansal?

- What were the circumstances that prompted the board to make a value judgement?

It should be noted that Infosys has not divulged information on the severance package paid out to Bansal at the time of his exit. It was not even revealed in the annual report of 2016.

Reportedly, Bansal was paid Rs 17.30 crore, equivalent to 24 months' salary, as part of his severance package.

"At that time, it was a business judgement. There was an application of mind by the board, and it was agreed to be paid. In retrospect, I have no hesitation in saying perhaps that judgement would have been different if circumstances were different, or if the processes had been there," Seshasayee said on Monday while addressing the media.

He maintained throughout that he has been appointed by the shareholders, and is answerable to the board of the company.

“Shareholders and the board have asked me to do a job. As long as they don't ask me... I will do my job,” Seshasayee, a chartered accountant by profession and renowned for his finance management skills at Ashok Leyland and IndusInd Bank, said.

He also assured that subjectivity in the severance policy had been removed.

Changing times

On the issue of changing times, both Seshasayee and Sikka spoke about values, but emphasised that the road ahead would be more professional-driven than founder-led.

On the issue of corporate governance, Seshasayee said whatever is happening currently is part of the change in the company, as it veers from a founder-led to a professionally-driven one.

“It is a challenging transition, and we have to deal with it in a sensitive fashion. This does not mean that the board and the founders have divergence. I passionately believe that this model of professional board and management is the right model for the country,” Seshasayee said.

As CEO, Sikka already has outlined his vision for the year 2020. He maintained that to achieve the goals of the vision, the strategy is simple: 'new, renew'.

“Why I came to Infosys was because of the keenness on tradition and upholding values and culture. We have done well in performance in revenue terms, customer satisfaction or opening new frontiers. We have upheld values. These are not easy times,” Sikka said.

He maintained that there is a tremendous amount of change that is going to happen in the industry. “The role of automation, the role of digitisation of processes of our clients is going to have a massive impact on our industry over the next three, five, seven years. It is inevitable, the way I see it, and I want to elevate my company to the next level,” he said.

Both the top leaders of the IT major agreed that current crisis or controversy distracts their attention.