Business Case Studies,Corporate Governance & Business Ethics Case Study, Infosys: Return of N R Narayana Murthy

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Infosys: Return of N R Narayana Murthy


Code :HRM0084

Year :

Industry :Information Technology and Consulting

Region : India

Teaching Note: Available

Structured Assignment : Not Available

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Backgroung NoteInfosys had a modest beginning in the year 1981 with Rs 10,000 as capital. The company that Narayana Murthy along with six others co-founded, reached a market capitalization of Rs 11 billion by the year 2000. By 2001, Infosys was one of the biggest exporters of software from India. Infosys was well known for its corporate governance and was extremely pro-active in its approach toward corporate governance when it publicly declared its retirement policies for its board members who handled executive positions. According to S. Gopalakrishnan (Kris), one of the co-founders of Infosys, “We have publicly stated the company would be run by professionals from inside; it’s not family owned....

Succession In Executive Leadership At Infosys Narayana Murthy served as CEO of Infosys during 1981 – 2002. Corporate strategy, brand equity, planning, external contacts, achievement of annual business targets, acquisitions, and other management matters were the responsibilities of the CEO. Under Narayana Murthy’s stewardship, Infosys crossed many milestones. (Refer to Exhibit I for the achievements of Narayana Murthy and to Exhibit II for Infosys under the leadership of Narayana Murthy)....

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ChairmanNarayana Murthy was the Executive Chairman of Infosys for the period 2002–2006. He relinquished this executive position on August 20, 2006, when he turned 60 years of age and continued to serve as non-executive Chairman and Chief mentor of Infosys from 2006 to 2011. In August 2011, when he turned 65, Narayana Murthy relinquished both these roles that involved boardroom participation. He served as Chairman Emeritus after that. According to Narayana Murthy, “As I will be called Chairman Emeritus, that will not give me a seat on the board and that will not allow me to participate in the strategic deliberations of the senior management of the company. I respect institutions and will not violate norms.”...

Business Scenario Infosys, which had consistently outperformed the expectations of its investors, analysts, and the capital market pundits, began facing problems in 2009. In April 2011, Mohandas Pai (Pai), the Chief Financial Officer (CFO) of Infosys, resigned. Pai was instrumental in steering the NASDAQ listing of Infosys and was a contender for the top job of CEO at Infosys outside the founders. According to Pai, “The founders have been dominating the management stream.” Pai’s departure turned the spotlight on the founders and lent credence to accusations that Infosys was run by its founders like a family-owned enterprise....

Return Of Narayana Murthy In a sudden development, on June 01, 2013 Infosys announced that Narayana Murthy had been appointed as Executive Chairman of the Board and Additional Director with effect from June 03, 2013. Kamath was to step down as the chairman of the board to become a lead independent director. According to Kamath, “The Board has taken this step keeping in mind the challenges that the technology industry and the Company faces and in the interest of all stakeholders, particularly shareholders large and small, who have asked for strengthening of the executive leadership during this challenging time. Narayana Murthy’s entrepreneurial and leadership record and the long experience he has had as a technology pioneer makes him eminently qualified to lead the company and provide strategic direction at this point in time.” ...

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