NRN Diatribes Push Sikka Out Of Infy: Is He Doing Damage To Company He Built?

The resignation of Vishal Sikka, managing director and CEO of Infosys, is indicative of what can happen to a company when the founders are unwilling to let go. For the last few months, Sikka and the Infosys board have been targeted by founder N R Narayana Murthy for alleged acts of corporate misgovernance, but it is far from clear that Murthy himself is not doing damage to the reputation of the company he built.

An iconic company can live with a few bad corporate decisions, but not with an atmosphere of mistrust and suspicion between founders, board, and the top management. That this mistrust has precipitated by Murthy himself is obvious from his tendency to leak sensitive material to the media even before the board can take up the issue.

In his blog and message to Infosys employees, Sikka made it clear that Murthy’s repeated targeting of the board and him personally led to his decision to quit. He wrote: “It is clear to me that despite our successes over the last three years, and the powerful seeds of innovation that we have sown, I cannot carry out my job as CEO and continue to create value while also constantly defending against unrelenting, baseless/malicious and increasingly personal attacks.”

What may have precipitated his exit was a letter leaked to Mint, which makes it clear that Sikka was the man Murthy was after. An excerpt from the letter has Murthy saying: “All that I hear from at least three independent directors, including Mr Ravi Venkatesan (co-chairman), are complaints about Dr Sikka. They have told me umpteen times that Dr Sikka is not CEO material but CTO material. This is the view of at least three members of the board, and not my view since I have not seen him operate from the vantage point of an Infosys board member.”

That Murthy should put these points in the public domain, causing embarrassment both to the board and Sikka, tells a story of its own. This is even more damaging than allegations of corporate misgovernance, for it is tantamount to saying that Murthy himself, and the board, picked the wrong man to head Infosys three years ago. And that many of the board members have doubts about Sikka’s competence for the CEO’s job.

The leaked letter effectively drives a wedge between Sikka and the board, forcing the board to now come out openly against Murthy’s efforts to queer the pitch for Sikka.

In a note put out today (18 August), the board lays the blame for Sikka’s exit solely on Murthy’s meddling, saying that his “continuous assault, including this latest letter, is the primary reason that the CEO, Dr Vishal Sikka, has resigned despite strong board support.” (Read the full Infosys press statement here)

Further, it accuses Murthy of lying, and alleges that his “letter contains factual inaccuracies, already-disproved rumours, and statements extracted out of context from his conversations with board members.”

The board has now taken the battle to Murthy’s camp, by squarely holding him responsible for tripping a company when it is in the throes of change and transformation. The letter said that Murthy’s “campaign against the board and the company has had the unfortunate effect to undermine the company’s efforts to transform itself.” After declining to speculate on why Murthy had a bee in his bonnet, the board said it must “set the record straight on the false and misleading charges made by Mr Murthy because his actions and demands are damaging the company and misrepresent its commitment to good corporate governance.”

The board rubbished Murthy’s implied suggestion that it was not happy with Sikka. It said: “The company categorically rejects any speculation or allegation of discord between the Infosys board and Dr Sikka.”

The big question is this: is Murthy, in his alleged campaign to force the company to stick to high standards of corporate governance, now effectively damaging its ability to set itself right?