Murthy Vs Infosys Board: A leaf out of the Ramayana

MC Govardhana Rangan

Phrases like ‘revolutionary’ and ‘game-changing’ are used too often, and loosely, to describe events that hardly matter to people. With the benefit of history, one can with reasonable authority describe Infosys founder NR Narayana Murthy’s management practices ‘revolutionary’.

What did he revolutionise though? To be frank, it was honesty! What???


Isn’t every individual supposed to be honest? Imagine someone being celebrated as god for a quality that is a necessary ingredient in everyone’s life? In a world of corporate banditry, Angel Murthy’s advent into Indian stock exchanges was worth celebrating. Investors were so deprived of honest businessmen that they paid the ‘Murthy premium’ to own Infosys.

A fund manager once said, “Murthy showed the Indian corporate world that you can get richerby keeping money in the company than by siphoning it off.”

Investors who did not trust even financial statements in the 90s, began taking the word of Murthy for gospel. With him came the phrase ‘corporate governance’ into Indian business lexicon.

After inspiring investors, regulators, and entrepreneurs for two decades, the god of governance is questioning the practices at the very firm where he established these principles. The debate on whether Murthy and his fellow-founders are right in doing what they are doing can hardly be settled. Every shareholder has a right to question the actions of the board. And the board is obliged to answer. Can one shareholder have disproportionate voice in getting his way?

Once a company gets listed, every shareholder should be equal in the eyes of law and the board. What about times when interests militate? If an organisation is professionally run, then there are enough systems and processes in place which take care of the interests of all stakeholders.

If promoters are saying they don’t trust the board they had a hand in creating, it is a reflection that the company is yet to reach the professional standards that everyone assumed it had. He blames the board of directors for dilution in governance standards and the board in turn blames him for meddling that led to chief executive Vishal Sikka’s exit. Neither of it can be absolute truth.

The board of Infosys comprised professionals with some standing in the corporate world — from R. Seshasayee, its chairman, to former Crisil CEO Roopa Kudva to D. Sundram, formerly of Hindustan Unilever, Microsoft India ex-chief Ravi Venkatesan and Biocon’s Kiran Mazumdar-Shaw.

To put it bluntly, Murthy is questioning the integrity of all these people, eminent in their own way, and is saying I decide the principles of governance whether I am on the board, or outside of it. Infosys websites prominently display its corporate governance philosophy as expounded by Murthy.

“Good corporate governance is about maximising shareholder value on a sustainable basis while ensuring fairness to all stakeholders: customers, vendor partners, investors, employees, government and society,” Is he being fair when he indirectly charges the board of compromising on values?

Can god get it wrong? While there is little debate among believers that Lord Ram personified all the possible virtues that a human can ever possess, even the pious question his act of doubting the chastity of his wife Sita on a washerman’s hearsay. Status of Murthy, at this point, is no different.