India‘s second biggest software services exporter Infosys firmly backed its chief executive on Thursday, downplaying corporate governance concerns and an alleged rift between the firm’s founders and its board.
Three founders, N.R. Narayana Murthy, Kris Gopalakrishnan and Nandan Nilekani, wrote to the board in January expressing concerns about Chief Executive Vishal Sikka’s pay rise and the severance package offered to two former officials, Indian news channel CNBC-TV18 reported on Tuesday.
Differences between Infosys founders and the board come at a time when India’s Tata conglomerate is mired in allegations of corporate governance lapses by its former chairman, who has waged a legal battle against his ouster.
In its first detailed statement about the various concerns raised by its founders, Infosys said on Thursday it was on a path to transformation under Sikka’s leadership.
“The board is fully aligned with the strategic direction of Dr. Vishal Sikka and is very appreciative of the initiatives taken by him in pursuance of this transformation,” R. Seshasayee, Infosys board chairman, said in a statement.
“Vishal and the board, while being pleased with the company’s resumption of industry leading performance on many parameters, are keen to further accelerate the progress and achieve even more shareholder value increase, on the foundation of sound governance,” the statement said.
The IT company said its founders and board could have differing views on issues such as Sikka’s compensation, the appointment of certain independent directors and the severance paid to former employees but all decisions were taken with the approval of shareholders and the necessary disclosures.
“The issues highlighted by the media … are several months old, on which the company’s position has been repeatedly explained,” Infosys said in the statement.
It emphasized the board’s autonomy and said its members were professionals with a vast experience. “The independent directors have no interest other than their commitment to enable this great institution that has been assiduously built by the iconic founders, to succeed,” the statement said.
The board was open to suggestions from various stakeholders, including founders, but “is committed to fulfilling its fiduciary responsibility to act independently and in the overall interest of the shareholders, the statement said.
Infosys said it has recently appointed corporate governance experts to receive and assess input from various stakeholders and make recommendations to the board.
“The company will take every step to uphold the standards of governance processes,” it said.
The board also expressed complete confidence in the leadership of its chairman to guide the company in “these challenging times”.