In bringing back NR Narayana Murthy as executive chairman, Infosys may have taken the final cue from the return of retired chairman AG Lafley last week to head global consumer giants major Procter & Gamble.
NR Narayana Murthy, newly appointed chairman of Infosys Technologies speaks during a press conference at the company's headquarters in Bengaluru. PTI
But there is little doubt that a clamour had been building up for about 18 months among shareholders to seek the return of the founder to take charge of the company that put India on the global software map.
Company sources said Infosys non-executive chairman KV Kamath (now an independent director) had differences with Murthy over the company’s conservative approach to managing its cash pile of Rs. 24,000.
While Kamath wanted Infosys to use its cash reserves to make a big-bang acquisition, he also wanted Infy to cut its profit margins to attract more customers. In both matters, Murthy resisted the efforts, the sources added.
Then, there was the problem of image.
“The whole issue is about perception. CEO SD Shibulal has simply been unable to communicate his strategy to the market and with Infy slowly but steadily losing both market share and revenue to its rivals, the cry for Murthy only got shriller in the recent months,” said a top executive of Infosys who did not want to be identified.
Investors had been growing impatient with growth rates that lagged peers, raising doubts on Infosys’s status as a market bellwether.
“The investors did not wish to settle for any body from outside fearing this might send a wrong signal to the market about the current leadership team. The need of the hour was to have a seasoned hand at Infosys, and who better than Narayana Murthy to lead the firm at this crucial juncture,” said Achen Jakher, an IT analyst and CEO of US-based tech firm Svelte Systems.
Though Kamath formlly invited Murthy to come back to an executive role at Infosys on May 4, senior executives said the founder, who has an uncle-like charm over Infosys’s army of software engineers had begun showing his presence for the past two months.
Following the formalisation, this will now only grow.