Infosys board to decide on Narayana Murthy's successor today
Amid the heightened interest in industry circles and markets over who will succeed after NR Narayana Murthy's retirement, Infosys board of directors is meeting in Bangalore today to finalise the plans of next leadership.business Updated: Apr 30, 2011 11:26 IST
Amid the heightened interest in industry circles and markets over who will succeed after NR Narayana Murthy's retirement, Infosys board of directors is meeting in Bangalore on Saturday to finalise the plans of next leadership.
"The board of directors will meet on April 30, 2011 to finalise plans for the company's leadership succession, post NR Narayana Murthy's retirement as chairman of the Board in August 2011," the company had said.
Current CEO S Gopalakrishnan is tipped to take over as chairman when Murthy retires, while present COO SD Shibulal is expected to be promoted to the post of chief executive officer.
Infosys has a practice of founder members becoming chairman. The billion dollar question now is if the company will change this practice or opt for an outsider
The succession plans in the iconic company comes at a time when its not-so-exciting earning numbers have dampened the market expectations, while rivals like Tata Consultancy Services and HCL Technologies posted stellar results.
The company registered lesser-than-expected 13.6% growth in net profit at Rs 1,818 crore for in the last quarter of the previous fiscal.
TCS and HCL Technologies, on the other hand, posted 31.1% jump (Q4 FY'11) and 33% (Q3 FY'11), respectively.
The industry and markets have been keenly awaiting the succession plans at Infosys. More so, after the resignation of TV Mohandas Pai as director and head of human resources after putting in 17 years in the company. Pai was considered by many as the CEO material.
Murthy had stepped down as CEO in 2002, handing over office to co-founder Nandan Nilekani. Nilekani left the company in 2007 to join the Unique Identification Authority of India. Current CEO Gopalakrishnan took over the reins from Nilekani.
Infosys has also formed a nominations committee, comprising Professor Jeffery S Lehman, Deepak M Satwalekar (former MD and CEO of HDFC Standard Life Insurance) and KV Kamath (non-executive chairman of the board of directors of ICICI Bank).
The committee is responsible for succession planning for the roles of chairman, CEO, COO and CFO of the company.
Pai's exit had raised questions about strife within the management. Pai was quoted in an interview criticising the selection process for the CEO at Infosys.
He was quoted as saying that the board should assess a prospective candidate on whether he has the energy and fresh thinking required for the job and not just on experience.
However, Pai later retracted his statement saying his comments were "general" in nature.
After Murthy's exit, only two of the co-founders -- CEO S Gopalakrishnan and COO S D Shibulal -- will remain on the company board.
Co-founder K Dinesh will also retire from the company, after Infosys' Annual General Meeting on June 11, 2011.
Among the co-founders, Ashok Arora was the first to leave in the late 1980s, selling his stake. Afterwards, NS Raghavan left the company.
Infosys was started in 1981 by seven entrepreneurs including Murthy, Nilekani, Gopalakrishnan, Shibulal and K Dinesh. The founders started the company with an initial investment of Rs 10,000. Today, the IT and consulting company has revenues of $6.04 billion.
Headquartered in Bangalore, Infosys went public in 1993. It has a global footprint with 64 offices and 63 development centres across the US, the UK, India, China, Australia, Japan and Middle East among others.
While promoters have a 16.04% stake in the company, other shareholders include LIC (4.28%), Oppenheimer Developing Markets Fund (2.19%) and Abu Dhabi Investment Authority (1.93%).
Infosys and its subsidiaries had 1,30,820 employees as on March 31, 2011.