Nilekani borrows a leaf from mentor’s book

In the end, it all came to nothing. After a year-long and somewhat strident campaign to get ‘transparency’ back into Infosys which led to the departure of CEO Vishal Sikka, chairman R Seshasayee and a few other directors from the company, co-founder NR Narayana Murthy was officially informed early this week by the board that what he actually claimed to have seen was an illusion.

That his allegations were nothing but a figment of his imagination. That his startup, created with six others, was actually doing fine and while the company acknowledges his passion and his achievements, may he now step aside for it to get on with its business?

The board stopped short of calling Murthy a troublemaker though it must have been painful for the non-executive chairman, Nandan Nilekani, to convey this message to his mentor. He softened the blow by stating that Murthy’s allegations were well-intentioned.

When Murthy was hurling one allegation after another against the company’s board, many of them assumed he was privy to inside information. That he had enough proof to nail the accused. Murthy in one of his emails to some of his advisers, a copy of which was leaked to a business newspaper, wrote: “My problem is with governance at Infosys. I believe that the fault lies with the current board. If the board had not embraced inaction and had ensured proper governance then they could have created checks and balances required in any well-run company. That, alas, does not exist today.”

What does the email imply? Murthy is not making allegations here. He is categorical in saying that he firmly believes the board has gone astray and needs to be reined in. And Murthy is no ordinary shareholder for the board not to take cognisance of.

Infosys, on its part, did not sweep these charges under the carpet. It acted fast and roped in Cyril Amarchand Mangaldas, a reputed law firm, to investigate the allegations about the Panaya deal, severance pay to its former CFO, Rajiv Bansal, and whether its CEO, Vishal Sikka, was misusing the company’s funds for his travel.

When two whistleblowers wrote emails to the regulator, SEBI, Infosys initiated another probe by Gibson, Dunn & Crutcher which returned with the same results stating that it found no wrongdoing on the part of the board.

Once Nilekani took over the reins, he had two choices: order a fresh probe or go by the earlier reports.

The statement from Infosys makes it clear that Nilekani chose the latter; it came as no surprise to either Murthy or to another former director, Mohandas Pai, that the conclusions drawn were the same as that of the previous reports. In the aftermath of the high drama that was being played out over one year, where doMurthy, Sikka and Seshasayee stand?

The latter two are out of their jobs while the first one, according to critics, has lost face, though Nilekani may not have intended it that way.

It must have taken courage and fortitude for Nilekani to declare to the investor community that the board was right even if he left the difficult part — that Murthy was wrong — unsaid.

Nilekani could have postponed announcing his findings and informed investors and the media that his first and most important task was to set things right at Infosys. Everyone would have bought his argument; Murthy too.

For Murthy, the departure of key directors was good enough because what had been done could not be undone but its alleged perpetrators had been removed from the scene.

The board much later could have said that corrective measures were being taken so that such issues are not repeated. That would have allowed everyone involved in the episode to move on and put their respective lives back in order. Sikka and Seshasayee had those two probe reports to back them in case someone pointed a finger at them.

But the board chose not to use those face-saving measures. Instead, it announced its findings, however painful. Nilekani was only following the norms laid out by his mentor that it is better to face the truth and that institutions are more important than individuals. Murthy will concur and hopefully, the iconic company which changed the IT landscape in the country, will learn its lessons and move on.

That is exactly what the investors want too.

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