Infy board takes on NRN; Calls it a misguided campaign

Post Vishal Sikka’s resignation, Infy board has released its response and here is a short summary of the same:

  • Mr. Murthy’s continuous assault, including this latest letter, is the primary reason that the CEO, Dr. Vishal Sikka, has resigned despite strong Board support. 
  • Mr. Murthy’s letter contains factual inaccuracies, already-disproved rumours, and statements extracted out of context from his conversations with Board members.
  • The Board assures its shareholders, employees, customers and communities that it is committed not to be distracted by this misguided campaign by Mr. Murthy.
  • Mr. Murthy has demanded that the Board adopt certain changes in policy, else he will attack board members in the public, which threat was carried out when the Board did not acquiesce;Mr. Murthy’s has made repeatedly made inappropriate demands which are inconsistent with his stated desire for stronger governance.
  • Illustratively:

  • He has demanded that the Board appoint specific individuals onto the Board under similar threat, without appropriate disclosure and without regard to basic determinants of appropriateness or fit of the candidate for the role as a Board member;
  • He has demanded operational and management changes under the threat of media attacks;
  • Mr. Murthy wanted the demands to be adhered to without attribution to him.

Note that the board is all praise for Vishal Sikka, citing his performance as the CEO.
Infosys has grown in revenues, from $2.13B in Q1FY15 to $2.65B this past Q1. This was done while keeping a strong focus on margins, closing this past quarter at 24.1% operating margin, beating some competitors for the first time in many years, and improving against nearly everyone in the industry.
The revenue per employee of the Company has grown for six quarters in a row. Attrition has fallen, from 23.4% in Q1FY15 to 16.9% this past Q1, and high performer attrition is much lower than the overall Company attrition.

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