It's good practice to inform investors about bad news: Narayana Murthy

MUMBAI: Bring the bad news early to win the trust of investors -- this was a piece of advice Infosys Chairman Narayana Murthy offered small business entrepreneurs.

"Bring the bad news early and pro-actively to your investors. I always say, let the bad news take the elevator, good news can take the steps," he told an SME award event organised by ICICI Bank here this evening.

Murthy, who returned to the struggling Bangalore-based IT giant as Executive Chairman last month, said investors will trust an entrepreneur for his plainspeak. This in turn will embolden the entrepreneur to be more bold in decision-making.

"So as long as you are willing to be open to bring the bad news to the investors, then they will trust you. If they trust you, then you can take bold and tough decisions," he said and advised small business owners not to be "hesitant" in updating investors.

The IT industry icon asked entrepreneurs to derisk as much as possible and predict revenue pipelines with precision.

Infosys, which has seen a decline in its topline and giving weak guidance to investors, last month recalled Murthy back to an executive role five years after his retirement.