No governance lapses, rift between founders and board, says Infosys

Mired in controversy centring around differences between its founders and the management, Infosys today denied any governance lapses and emphasised that its board is "fully aligned with the strategic direction" of CEO Vishal Sikka.

Taking a strong stand on issues — purportedly raised by the founders — such as CEO's compensation and severance pay of former employees, Infosys said while the board appreciates and respects inputs from the founders, it is committed to fulfilling its fiduciary responsibility to "act independently".

"The board is fully aligned with the strategic direction of Dr Vishal Sikka and is very appreciative of the initiatives taken by him in pursuance of this transformation," Infosys Chairman R Seshasayee said.

He further said: "Vishal and the board, while being pleased with the company's resumption of industry-leading performance on many parameters, are keen to further accelerate the progress and achieve even more shareholder value increase, on the foundation of sound governance."

Over the past few days, the Bengaluru-based firm has come under fire over purported differences between some of the founders and the Infosys board. Infosys has maintained that all decisions were made "in the overall interest of the company" and that it has made "full disclosures" on all developments.

However, Infosys' former chief financial officer T V Mohandas Pai has recently said the board should give a detailed answer and not take shelter under "bland" statement that decisions were taken in the interest of the company, which further added to the speculations.

Defending the board, Infosys today said its team is independent and professional. "The independent directors have no interest other than their commitment to enable this great institution that has been assiduously built by the iconic founders to succeed," it added.

Stating that the board appreciates and respects inputs from the founders, Infosys said the team is "committed to fulfilling its fiduciary responsibility to act independently and in the overall interest of the shareholders".

To formalise this process, the board has recently appointed Cyril Amarchand Mangaldas to receive various inputs from promoters and other key stakeholders, evaluate them and make recommendations to the board.

"This will be an ongoing process for some time. The company will take every step to uphold the standards of governance processes, of which the company has always been an exemplar," it said.

Besides, the board has full confidence in the leadership of Seshasayee to steer this company in these "challenging times", Infosys' senior-most board member and Chairman of Nomination and Remuneration Committee Jeff Lehman said.

The Infosys founders, along with their family members, owned 12.75 per cent in the company at the end of December 2016, as per the data available on BSE. Sikka has also written to employees asking them not to get distracted by speculations that question the company's commitment to "governance, integrity and values".

He asked them to keep a "sharp focus" on executing the company's strategy, which is bolstered by its services like Mana, Skava, Edge, Panaya and cloud services.

"...let us keep a sharp focus on the execution of our strategy. Let us not get distracted by media speculation that is designed to stir up gossip or rehash old rumours or speculate on the unknowns, around visas, or anything that questions our commitment to governance, integrity and values, in order to generate headlines and create, in the words of The Wire, Eardrum Buzz," Sikka said in an internal mail.