Vishal Sikka’s departure from Infosys Ltd. comes at a time when the information technology giant is expected to miss its full-year revenue target amid shrinking client spending, increased automation and pressure on margins.
To put the company back on a strong footing, the board should rope in co-founder and former CEO Nandan Nilekani, according to proxy advisory firm Institutional Investor Advisory Services. The board of directors of Infosys must persuade Nilekani to join as the non-executive chairman, IiAS said in a note, stressing that he is possibly the best candidate who can be found globally.
Nandan Nilekani needs to be brought back, as the non-executive chairperson: he has the stature and gravitas to fit the pieces together.IiAS Note
The proxy advisory firm said that Infosys must “play right” in choosing Sikka’s heir “but to play it right, it must begin by reinventing itself”. Nilekani’s past success with Infosys, his understanding of corporate culture and stature make him the “best positioned to shepherd the company” through the troubles till it finds a successor, said the note.
IiAS said that Sikka’s resignation as the managing director and chief executive officer was expected due to constant public comments by a cohort of its founders led by Narayana Murthy. Sikka referred to Murthy’s criticism of him as a “continuous drumbeat of distractions and negativity” in his resignation letter. Even the Infosys board acknowledged Murthy’s constant interference.
Shareholders too have paid the price of Murthy’s comments which have been “a constant distraction, periodically destabilising the company”, said IiAS.
The proxy advisory also noted that it won’t be easy for the Infosys board to bring back Nilekani, who had left the company in 2009 to head the Unique Identification Authority of India that envisioned Aadhaar. While Nilekani joined the Indian National Congress in 2014 and contested in the Lok Sabha elections, which he lost, he has remained politically inactive in the past two years.
“Nandan Nilekani should not see this as any other corporate job,” said IiAS, adding that Infosys’ success will also “foretell how the sector will position itself for the future.”