Corporate ‘Dharma’ and the Infosys Rift

The Infosys founders must now hold their fire, and not do a Ratan Tata on Vishal Sikka.

The co-founders of Infosys Ltd. (Photo: Infosys)

The ‘rift’ between Vishal Sikka and the founders of Infosys, to my mind, is a totally unnecessary debate at this stage. Sikka enjoys the total confidence of the company's board.

All the so-called 'questionable' actions alluded to, have been overwhelmingly approved by the shareholders. Given our system of corporate jurisprudence, that is where the matter must rest with finality – unless of course, there is concrete evidence, not insinuations, of either fraud or wrongdoing.

This is probably why the mirage of 'values' has been raised in the story too. Values, at the best of times, are something most difficult to establish. It centres around the concept of 'corporate dharma' (doing what is right,) and is probably the most difficult question to answer to universal satisfaction.

What Is Dharma Or 'Doing What Is Right'?

This is a difficult concept as ‘right’ itself is open to interpretation. The question tests the moral compass ingrained within ourselves in the reality of the turbulent life we live in.

The good news is that our environment, and the human character which determines it, has not changed over centuries. Guidance is available on this subject through a study of historical, mythological and philosophical texts ranging from the Mahabharata, The Odyssey, and The Iliad to Arthashastra amongst others.

Also Read: Infosys Founders Question CEO’s Salary, Corporate Governance

Teachings in our respective homes are key to building our respective value systems, especially through works which encompass the wide breadth of concepts between spirituality on one hand and morality on the other like the Upanishads, Bhagavad Gita, and Biblical stories.

Even to the casual reader of these texts, one thing which conclusively stands out is that the moral haziness in these epics is closer to our current experiences as humans than the narrow and rigid positions that define most debates in this fundamentalist age of moral certainty.

The Mahabharata, for example, has many flawed characters, and even today, their ethical dilemmas do not have a right or wrong answer.

Everyone has a contrary take on dharma based on their perspective. Thus, the doctrine of dharma, which we can apply to relationships, business decisions and life itself, is something we need to discover for ourselves in our journey, by holding a mirror and confronting the many ways we deceive ourselves and others.

This applies to all aspects of life, including Infosys and its founders.

As long as Sikka’s decisions are not prejudicial to the interests of the company – or his judgments proven consistently wrong on matters of strategy – mere insinuation of faltering values cannot be the basis for such furore.

For example, the current compensation structures are different from those practised and relevant when Infosys was an exciting, high growth company. As is the question of a more proactive acquisition strategy in the current environment, or share buybacks.

Surely such metamorphosis is a reflection of fundamental strategy shifts at Infosys, not changing core values!

Let The Successor Be

Narayana Murthy and his team followed their own path and built an iconic institution. As did Steve Jobs. And Lou Gerstner. However, times change, markets evolve, and technologies advance. Backseat driving with an eye on the rear-view mirror is an unproductive practice.

Once the power to lead the institution has been relinquished, it is in the best interests of all concerned to let the anointed successor manage within the parameters of established corporate governance structures.

This does include a certain space for suggestions of large shareholder groupings including, but not limited to, the promoters. The Tata-Mistry affair is too fresh in our collective memories, reminding us of the perils of not following this path, howsoever iconic the characters involved in the saga maybe.

The founders must now hold their fire, and not do a Ratan Tata on Vishal Sikka.

I do believe Sikka’s strategy is broadly in the right direction and far bigger issues are at stake than iconic promoters feeling sidelined.

The information technology industry is in turmoil and Sikka, like others, has a tough job on hand which will have national implications.

Distractions of this nature will only harm the primary objective of reorienting the business model with its many moving parts in this age of Trump-related protectionism on one hand and digital disruption on the other. He must be given time to steer through it.

I have also argued before that, though it has a distinguished board, Infosys needs more representation from technology leaders to reduce their complete reliance on Sikka.

The board’s focus needs to expand from the usual financial metrics and intervene to guide the management when a company of this size and complexity makes a strategic shift.

To eliminate the noise raised in the media, all shareholders would be well served if the board chooses to do this soon to close this matter and prevent another episode of an undignified public spat that corporate India can ill afford.

(Prabal Basu Roy is a Sloan Fellow from the London Business School and a Chartered Accountant. He presently manages a PE fund and has formerly been a director and group CFO in various companies.

The views expressed here are those of the author’s. This article originally appeared on BloombergQuint.com.)