Infosys heads for moment of truth

The exit of Mohandas Pai, the head of human resources at Infosys Technologies, amid a less-than-expected performance by the technology bellwether, should not come as a surprise to keen company watchers.

The exit of Mohandas Pai, the head of human resources at Infosys Technologies, amid a less-than-expected performance by the technology bellwether, should not come as a surprise to keen company watchers.

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Few believe that Pai’s exit after 17 years was related to anything other than the fact that he was unlikely to be named managing director. He was only asked if he was an aspirant — which is not the same as being offered the job.

Infosys now has a dilemma to resolve. In the words of its own Chairman N R Narayana Murthy, the company is a merit-based organisation.

Thus far, the CEO has invariably been one of the co-founders. Stories abound on the camaraderie between the founders, who worked with the emotional links of a family, while excelling in professional matters — even as the shareholding of the company turned wider. The founders today do not own a collective majority. Foreign and other institutional investors can potentially dislodge the management.

So, the question is: After Shibulal, who? (Unless there is a big management surprise later this month)

Whatever the detail, the simple fact is that Infosys has to address two questions in the coming years: 1) Is it a global company that just happened to be of Indian origin? 2) What will happen when the “family-style” meritocracy sees a sunset?

What its current board does will be keenly watched by the majority of shareholders, who eventually wield the real voting powers.