A new generation of Indian entrepreneurs is looking to leaders like Murthy, Nilekani and Gopalakrishnan on how to do it right.
When Infosys executive chairman Narayana Murthy declared in June this year that he was relinquishing his job and hanging up his Infosys boots and that the last of the founders would exit executive roles, this newspaper launched a frantic hunt for a photo. A vintage snapshot of all the founders at the iconic firm’s naissance 33 years ago would have been most appropriate for the feature in the Sunday pages.
Many grainy images of the founders in the early days were available. One had a couple of founders and wives at what looked like a birthday cake-cutting. Another showed a few founders in geeky glasses squatting on a flight of steps. Yet another sepia-toned photo showed two founders and their wives at a picnic. However, not a single photo was available of the founders together in 1981, the year Infosys was founded, or even just after.
So it was more than ironic that earlier this month, six formally dressed men offered a variety of “photo ops” on what was their farewell as the founders of Infosys. The final day line-up was complete. There was Murthy himself, alongside N.S. Raghavan, Nandan Nilekani, K. Dinesh, Kris Gopalakrishnan and S.D. Shibulal. The only missing face was of Ashok Arora, who quit the startup team early on. It was an emotional moment for the firm and its founders, though they laughed and joked their way through the day.
Soon, the founders will turn into ordinary shareholders of Infosys, a move that is beneficial not just to the firm but to themselves as well. In turning into regular shareholders, the founders’ (and their families’) total shareholding of almost 16 per cent in the company will be considered to be free-floating shares and enhance its appeal to investors. Their new status as public shareholders will give them the freedom to sell their shares when they choose, without board sanction.
For Murthy and his cohort, there could have been no more opportune a moment to make a graceful exit. A new CEO is in place and seems to have gotten off to a good start by presenting better than expected profits in his first quarter of taking over — a 28.6 per cent rise in net profit for the quarter ended September 30 and a 2.9 per cent growth in revenues. Making a clean break at this juncture will give the firm’s new professional leadership a chance to shape and steer the company’s future from here on.
At the farewell meeting, Murthy talked about his decision not to keep the ceremonial title of “chairman emeritus” at Infosys in order to avoid any perceived conflict. Murthy was the epitome of Infosys values when he said he wants to be a “Regular Joe” instead. There is nothing average or regular, however, about Murthy and his cohort, who built not just the Infosys brand but, in parallel, also helped grow India’s brand as a globalising, forward-looking country with an enormous talent pool. Infosys’s listing on Nasdaq in 1999, the first
Indian company to list on an American stock exchange, was a landmark event. Since then, the Rs 28 crore firm has grown to Rs 2,00,000 crore in market capitalisation.
Infosys has had its share of challenges. It was not until the company ran out of founders to fill the chief executive position that an outsider was finally brought in earlier this year, much to the disappointment of its investors, who watched its performance slide during the last few years. Again, last year, it faced censure when Murthy jumped out of retirement and was back in the thick of things — trying to resurrect the flailing firm with his son Rohan as his executive assistant. Despite these transgressions, though, no company has influenced India’s corporate landscape as much as Infosys, with its clean governance principles and adherence to high ethical standards.
In their graceful and absolute exit, too, Infosys’s founders showed the way to corporate India, where even the biggest firms are fond of parachuting sons, daughters and assorted relatives into executive and board positions. The founders will no longer associate with the company or exercise any control over its affairs. It will be a clean break.
They may have departed from Infosys but in their wake, a new generation of Indian entrepreneurs is looking to leaders like Murthy, Nilekani and Gopalakrishnan on how to do it right in India. Many Average Joe Indians will watch them to see how they employ their enormous personal wealth to doing work with a social conscience. In other words, the founders may have left Infosys, but they can never really stray from the public eye.