June 1, 2013 10:15:26 pm
Less than two years after he gave up all official roles at Indias information technology bellwether Infosys Ltd,a company he founded in 1981,66-year-old N R Narayana Murthy has come out of retirement to serve again as the executive chairman of the Infosys board for the next five years.
Narayana Murthys son Rohan Murty,29,a PhD in computer science from Harvard,has been chosen to assist his father during this fresh tenure. Narayana Murthy will join CEO and managing director S B Shibulal,like him,one of the founding employees of Infosys,in running the company.
The surprising decision taken by Infys board of directors on Saturday appeared to run contrary to some of its own leadership practices of retirement from executive functions at 60,and attempts at keeping family members out of the scene.
Narayana Murthy had given up all executive functions at Infosys in 2006 when he turned 60 and stepped down as the executive chairman of the board after serving as the founding CEO from 1981 to 2002. From 2006 to August 20,2011,he served as non-executive chairman and chief mentor.
Following his retirement at 65 in 2011,the company gave him the special status of chairman emeritus with a final retirement age of 70.
Murthys fresh tenure,which began on Saturday subject to approval from shareholders,is widely seen as a result of Infosys growth rates lagging behind industry averages over the last year,which resulted in the company losing its position of the No. 2 Indian IT firm to Cognizant Technologies.
Murthy and the outgoing chairman of the Infosys board,K V Kamath,said the changes were demanded by internal and external
challenges faced by Infosys. But both asserted that the return of Murthy was not a reflection of things having slipped at the over 7 billion-dollar revenue company since Murthy gave up executive functions in 2011.
With Narayana Murthys return to the helm of affairs,Kris Gopalakrishnan,executive co-chairman of the board,has been re-designated as vice-chairman. K V Kamath,the other co-chairman,will be lead independent director.
The move to bring in Rohan Murty as executive assistant to Narayana Murthy was seen in some quarters as being an effort to put in place a long-term succession plan after the founding CEOs exit in 2015. Murthy denied this.
Announcing the decision to bring back Murthy as executive chairman,Kamath on Saturday said the step was taken keeping in mind the challenges that the technology industry and the company faces and in the interest of all stakeholders who have asked for strengthening of the executive leadership during this challenging time.
Murthys entrepreneurial and leadership record and the long experience he has had as a technology pioneer makes him eminently qualified to lead the company and provide strategic direction at this point in time, he said.
Murthy who is known to be possessive about Infosys wanting to control everything from the choice of décor to business plans on his part said that he had not in his wildest dreams imagined that he would return to executive functioning when he retired in 2011.
When Kamath invited me on May 4 to add value to the company,to add value to Shibulal,I was in a dilemma. Then I realized that I was fortunate to add value to previous Infosys CEOs as well so I saw this as an opportunity to add value to the mission of Shibulal, he said.
This calling was sudden,unexpected,and most unusual. But then,Infosys is my middle child. Therefore,I have put aside my plans-in-progress and accepted this responsibility.
Murthy said he looked at his return as a second innings,and that he had decided to bring his son Rohan Murty along since he had decided in 2011 to do things in the company of his loved ones. He also said that he needed his sons guidance to communicate with the youth at Infosys.
But he said there was no leadership role for Rohan.
Murthy declined to say what had triggered the need for him to return. But he said that one of the strategic things he was hoping to do was focus on large application development,maintenance and business process management.
Infosys CEO Shibulal said the return of his mentor Murthy made him glad. I have interacted with him for the last 32 years. There is nothing for me to rethink in terms of functioning, he said.
Murthy started Infosys after borrowing $ 250 from his wife,and transformed it into a $ 6 billion-revenue company with a market capitalization of $ 36 billion before retirement in 2011,running the company with a constant emphasis on growth margins.
Three co-founders Nandan Nilekani,who was succeeded by Kris Gopalakrishnan,and now Shibulal have run Infosys since 2002 when Murthy stepped down as CEO giving the impression that corporate governance standards at Infosys were among the highest for public-listed Indian companies.
In recent times,with the IT industry getting commoditized,Infys growth margins have fallen from their peaks,and competitors like TCS and Cognizant have played the field better. There have also been indications that new CEOs have not able to command the kind of respect in the company like some of their predecessors,leading to slackening performance.
Murthy said he would add value to Infosys in terms of ideas and implementing decisions with a sense of alacrity and enhancing excellence.
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