Infy ex-CFO Bala backs Murthy, says board chair, co-chair must go
He cited lapses in corporate governance starting from the severance pay given to a former CFO.
Balakrishnan cited several instances of lapses in corporate governance starting from the severance pay given to a former CFO and a former legal counsel to the Panaya issue.
“I think the answers are not forthcoming. Shareholders have the right to know when you spend Rs 10 crore of their money in doing an investigation. They have a right to know what the investigators have looked at, what is the conclusion and what is the process they have gone through,” he said.
The scope of any investigation is very important.
He said the time has come for the company’s chairman to step down. The co-chairman also needs to step down, because he publically discussed the performance of the CEO and that was one of the trigger points for the CEO to leave.
“After all this happened, to come and say that the board is fully in charge has no meaning. I think the audit committee chair and the nomination committee chair should also take the responsibility,” Bala said.
Murthy never raised finger on the performance of Vishal Sikka. It is some board members who privately went and told him Vishal is not a CEO material.
“All that Murthy has been talking about all along is the governance issues and disclosure practices which Infosys has always been known for. It is a goal standard for governance, and this has gone down under this board and he wanted corrective action. If he wanted power, he would not have left in 2014, he could have continued in some form,” the former CFO said.
“All the founders left together, gave the company to a professional board. It was a good experiment because you need to transition from a founder-run company to a professionally-managed company. They all left together to give freedom to the new CEO to run the business. But what happened was a governance failure. It is a collective failure of the board,” he said.
Bala specifically pointed to the whistleblower complaints, which he thought were serious ones.
“The whistleblower said some people in the management have personally benefitted from some of the transactions. There was serious allegation against the board members and the management. When you have a serious allegation like this, the board should come out clean. It should explain much more than what is required. Here you have a board which does not want to explain, which does not want to give all the information to shareholders and always say they are clean. I mean, who is going to believe that unless you put out the full report,” said .
Hinting that he too felt the same way as Murthy, Bala claimed a lot of shareholders had reached out to Murthy. “Some people are very vocal, some people do not talk.”
He said investors are concerned about all the happenings in Infosys and they all wanted corrective action. Probably, they would have met the board also to express the same concern. “All I am saying is board has not done enough to alleviate all the concerns the investors had about the company,” he said.
He said CEO selection is not the most important thing. The most important thing is to first restructure the board, let go some of the board members and then have an ideal balance in the board which will create the checks and balances. Only then a professional CEO will come and join.
“If you have an acrimonious relationship with a large investor like the founders, who have built the company, and the board is not restructured, the same people keep running the company, I do not see any hope of any good professional CEO joining the company,” he said.