Corporate governance took the centre stage in India with two iconic organisations going through the worst of times. Tata Sons and Infosys have been in the news for past one year 10 months for all the wrong reasons. In separate instances, both the companies' boardroom tussles became public, which for sure shouldn't have happened with companies having huge brand value.
In both the instances, promoters and founders, Ratan Tata for Tata Sons and N.R. Narayana Murthy for Infosys, were in the epicentre of the corporate storm.
For Tata Sons, it all began at Bombay House with the ouster of Cyrus Mistry as the chairman in October last year, resulting in Ratan Tata taking over as the interim chairman of Tata Sons.
Questions were raised on how Mistry was running the Tata Group and he had been criticised for taking certain strategic decisions. The tussle became murkier and led to a slew of allegations and counter-allegations. Finally, the Mistry-Tata battle landed in the courtrooms.
Mind you, the war is not yet over. It was only yesterday when the Board of Tata Sons, under the chairmanship of N Chandrasekaran, has ordered its group to snap all ties with Cyrus and elder brother Shapoor Mistry owned SP Group. Currently, SP Group holds about 18.4 percent stake in Tata Sons.
In the Infosys story, co-founder and former CEO and present Chairman Emeritus, Narayana Murthy, publicly expressed his unhappiness over the current management. CEO Vishal Sikka flagging issues like higher compensation to executives, acquisition strategy and appointment of independent directors were not well received by him.
After months of letter exchanges and press interviews, Vishal Sikka on Friday morning stepped down from the position of CEO and managing director of Infosys.
While the Tatas chose to remove Mistry, in the case of Infosys, the situation forced Sikka to step down.
In his personal blog, Sikka wrote:
For days, indeed weeks, this decision has weighed on me. I have wrestled the pros and cons, the issues and the counterbalancing arguments. But now, after much thought, and considering the environment of the last few quarters, I am clear in my decision. It is clear to me that despite our successes over the last three years, and the powerful seeds of innovation that we have sown, I cannot carry out my job as CEO and continue to create value, while also constantly defending against unrelenting, baseless/malicious and increasingly personal attacks.
Days earlier, former Chief Financial Officer of Infosys, T V Mohandas Pai, pitched for the return N R Narayana Murthy as Chairman Emeritus, by saying the move will improve the brand and showcase high corporate governance standards.
In both the occasions, the irony is, Ratan Tata and Narayana Murthy handpicked their respective successors, and issued happy notes while offering their appointments.
An important question pops up here. Do the owners/founders have to question every move of their successors when they are running the business just because the former have diligently built the company over many summers?
