Nandan Nilekani has returned to Infosys to restore the lustre of the country's second-largest software services firm, replacing R Seshasayee, who resigned as chairman of the board. Nilekani's return, one of the most dramatic comebacks in recent corporate history, marks the second instance of a retired co-founder being handed the reins to steer the marquee corporation out of trouble. In 2013, iconic founder NR Narayana Murthy had returned to stem the tide of faltering growth at the company.
On Thursday -the embattled board of Infosys, which has been the target of extreme ire from Murthy for what he termed as grievous lapses in corporate governance -gathered for a three-hour-long huddle via video conference before announcing the appointment of Nilekani and the exit of two more board members -Professor Jeffrey Lehman and Professor John Echtemendy with immediate effect. Co-chairman Ravi Venkatesan will return to his role as independent director.
Former CEO Vishal Sikka, who was to have stayed on as executive vice chairman until March 2018, will resign with immediate effect, according to the company statement. Sikka had resigned as CEO just last Friday .
Nilekani, 62, who helped found the company once regarded as the bell wether for India's $150-billion technology outsourcing industry, will take charge as Infosys' non-executive non-independent chairman at a time when the company faces a raft of internal challenges in addition to the threat of slowing growth for Indian IT services companies. His return to Infosys, say people in the know, was led in a large part due to the vociferous demand from investors, employees, cofounders and top advisors after Sikka's shock exit led to a precipitous drop in Infosys stock and a loss in market capitalisation by nearly Rs.20,000 crore, dragging down indices on two consecutive trading days.
Nilekani's first challenge will be to manage the transition as the company rebuilds its top management team.
Nilekani faces a tough road ahead. He will have to calm clients who were already spooked by the prospect of Sikka's departure in March. Their concerns will likely be exacerbated by his immediate exit. He also has to smooth the feathers of Infosys' foreign institutional investors, who were vocally displeased by the preferential treatment being offered to the company's founders -who own just under 13% of the company .
Nilekani and family together own 2.2% of Infosys shares, while Murthy and his family own about 3.44 %.
Nilekani's return brings to fruition months of effort by Murthy to change the board. Murthy, 71, has been demanding clarity on a series of issues including severance pay to former CFO Rajiv Bansal and the terms of the acquisition of Israeli software company Panaya. Following complaints by whistle blowers in February, Infosys tasked law firm Gibson, Dunn and Crutcher with investigating the charges and was exonerated of any wrongdoing, Murthy has since been demanding that the findings of the investigation be made public.
On Thursday, over 80 ex-Infosys executives also sent a letter to the board asking it to withdraw the letter it sent to the stock exchange attacking Murthy.
On Thursday -the embattled board of Infosys, which has been the target of extreme ire from Murthy for what he termed as grievous lapses in corporate governance -gathered for a three-hour-long huddle via video conference before announcing the appointment of Nilekani and the exit of two more board members -Professor Jeffrey Lehman and Professor John Echtemendy with immediate effect. Co-chairman Ravi Venkatesan will return to his role as independent director.
Former CEO Vishal Sikka, who was to have stayed on as executive vice chairman until March 2018, will resign with immediate effect, according to the company statement. Sikka had resigned as CEO just last Friday .
Nilekani, 62, who helped found the company once regarded as the bell wether for India's $150-billion technology outsourcing industry, will take charge as Infosys' non-executive non-independent chairman at a time when the company faces a raft of internal challenges in addition to the threat of slowing growth for Indian IT services companies. His return to Infosys, say people in the know, was led in a large part due to the vociferous demand from investors, employees, cofounders and top advisors after Sikka's shock exit led to a precipitous drop in Infosys stock and a loss in market capitalisation by nearly Rs.20,000 crore, dragging down indices on two consecutive trading days.
Nilekani's first challenge will be to manage the transition as the company rebuilds its top management team.
Nilekani faces a tough road ahead. He will have to calm clients who were already spooked by the prospect of Sikka's departure in March. Their concerns will likely be exacerbated by his immediate exit. He also has to smooth the feathers of Infosys' foreign institutional investors, who were vocally displeased by the preferential treatment being offered to the company's founders -who own just under 13% of the company .
Nilekani and family together own 2.2% of Infosys shares, while Murthy and his family own about 3.44 %.
Nilekani's return brings to fruition months of effort by Murthy to change the board. Murthy, 71, has been demanding clarity on a series of issues including severance pay to former CFO Rajiv Bansal and the terms of the acquisition of Israeli software company Panaya. Following complaints by whistle blowers in February, Infosys tasked law firm Gibson, Dunn and Crutcher with investigating the charges and was exonerated of any wrongdoing, Murthy has since been demanding that the findings of the investigation be made public.
On Thursday, over 80 ex-Infosys executives also sent a letter to the board asking it to withdraw the letter it sent to the stock exchange attacking Murthy.
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