To disband 14-member Executive Council from April 1

Infosys on Friday restructured its business and appointed two Presidents who will handle key functions in the company.

While B. G. Srinivas will focus on global markets, U. B. Pravin Rao, who was recently inducted into the Board, will focus on global delivery and service innovation. Further, the 14-member Executive Council will be disbanded from April 1, according to a company statement.

Succession line-up

The moves have met with some optimism especially after the company is just recovering from the exit of CFO V. Balakrishnan, the latest in a long list.

But sources close to Infosys said that with N. R. Narayana Murthy already holding the reins of the company as Executive Chairman, it is likely that once S. D. Shibulal retires as CEO, one of the two Presidents will be asked to take over the post of Managing Director as an additional role to fulfil the statutory requirement.

“The CEO’s job is no longer relevant especially in a services or consulting company where the post is created to look after administrative functions,” said a former senior Infosys executive, who did not wished to be named.

A services company, he added, is actually an aggregation of clients some of whom are larger than the services company itself. Therefore, any client-facing role assumes more significance than even the top job created just to handle administrative functions.

Splitting jobs

He also said that splitting the top job into two or even three is always good as it decentralises the power structure leading to faster decision making, some thing Infosys badly needs.

However, it may be recalled that another software major, Wipro, for some time experimented with the post of two Joint Managing Directors. It discontinued the arrangement and appointed a CEO to run the company.

Ankita Somani, IT & Telecom Analyst with Angel Broking, said the new structure is a positive development and “it also shows that Infosys is grooming these individuals for a bigger role”.

New Portfolios

In the newly aligned portfolios, vertical heads in the financial services, insurance, manufacturing, engineering services, energy and communications, Infosys Public Services, Infosys Lodestone, Strategic Global Sourcing, marketing and alliances will report to Srinivas. As of end-October 2013, these businesses contributed around 57 per cent of Infosys’ revenues.

Pravin Rao will look after retail, consumer packaged goods and logistics, life-sciences, resources and utilities, services, growth markets, cloud and mobility, quality and productivity and Infosys Leadership Institute.

Analysts believe that the past strategy of having a dozen or so members in the Executive Council was not working and reducing them to two is the way forward. “It was not powerful and they are trying to streamline this with the new structure,” said Sundararaman Viswanathan, Manager – Consulting, Zinnov.

Interestingly, in August, two months after Narayana Murthy took over as Chairman, he made changes to the Executive Council and appointed Ranganath D. Mavinakere, Binod Hampapur Rangadore and Nithyanandan Radhakrishnan as members.

On Friday, Infosys shares closed at Rs 3,565.45, up 2.61 per cent, on the BSE, compared with the previous close.

(This article was published on January 3, 2014)
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