IT major Infosys announced that its Board at a meeting on Saturday morning re-appointed company founder N.R. Narayana Murthy Chairman, pulling the 66-year-old IT services pioneer out of his two-year retirement.
At a media interaction here, where he and outgoing chairman K.V. Kamath sought to explain the unexpected announcement, Mr. Murthy described the move as “sudden and unusual.” “Never in my wildest dreams did I think I would be back here in an executive capacity. This is unusual for me to be standing here in front of you [the media],” he said, seven years after he stepped down from the post of Infosys executive chairman.
His “second innings” — slated to last five years — is expected to be ratified by Infosys’ annual general meeting on June 15 and then placed for approval at an extraordinary general meeting of stakeholders. The company is also expected to increase the retirement age for the executive chairman from 65 to 75.
Joining him in this stint, at his special request to the Board, is his son Rohan Murthy. Appointed Mr. Murthy’s “executive assistant,” Mr. Rohan Murthy will be on a sabbatical from Harvard and like his father, will draw an annual compensation of Re. 1. When asked if this was not in contradiction with his earlier statements on keeping family members away from leadership roles at Infosys, he said: “This was an emotional decision for him as my entire family has an enormous emotional connect with the company. The company is my middle child, and he is part of a group of extraordinary youngsters who were working with me at Catamaran. His role will be to help me be effective.”
While Mr. Murthy desisted from commenting on the crisis the company is in, he maintained that his role would only be to “value-add” to the current leadership.
The decision comes a month after the country’s second largest IT services exporter missed its annual guidance for the second consecutive year, and registered decline in overall revenue growth. Its guidance for 2013-14 remained muted; the company attributed this to “extreme volatility.”
Mr. Kamath, who will now take up the position of Lead Independent Director, said the Board was considering this for a long time, and formally got in touch with Mr. Murthy on May 4. “We thought the company needs leadership that can take it back to its earlier bellwether status,” he said.
While avoiding questions on the nature of “crucial challenges” the company was facing, he said the Board felt the company needed strengthening of its executive leadership. S. Gopalakrishnan has been designated as Executive Vice-chairman, while S. D. Shibulal retains his post as MD and CEO of the company.