Advisory firm asks shareholders to vote against Murthy's return

Advisory firm asks shareholders to vote against Murthy's return

Advisory firm asks shareholders to vote against Murthy's return

 InGovern Research Services, a proxy advisory firm, with a history of taking independent stands on key corporate decisions has said that it wants shareholders of Infosys to vote against the appointment of N R Narayana Murthy as executive chairman at the company’s AGM on June 15.

InGovern said that bringing in Murthy as executive chairman to rescue a beleaguered Infosys, which is struggling to return to profitability, is in violation of the spirit of corporate governance espoused by the company.

Founder and Managing Director of InGovern Shriram Subramanian said, “The appointment is against the company’s policy.” He was referring to the company’s annual report for 2012-13, wherein it has reiterated its position: “Our current policy is to have an independent chairman of the board.”Calling the announcement of Murthy’s June 1 appointment “retrograde” and indicative of the company “eschewing principles for practicality”, InGovern, in its June newsletter, said: “By reappointing Narayana Murthy as Executive Chairman, the Board and the nominations committee seem to have been ineffective in arriving at an orderly succession plan.”

It said that the “culture of acquiescence and servility to the founder chairman may breed a culture of yes men” and termed appointment of Murthy’s son Rohan Murty as his assistant as “nepotism”.

On the sidelines of a session on “Executive Compensation in India” organised by the Centre for Corporate Governance and Citizenship, IIM-B and NSE on Thursday, at Bangalore,  an IIM-Ahmedabad professor, requesting anonymity, said that the appointment of Murthy is an act of “desperation” by Infosys. “It is sad that the company could not find someone from within or from outside and had to fall on him. It also sends a wrong signal for investors,” he said.

InGovern’s Subramanian said that shareholders should also vote against the resolution seeking reappointment of two independent directors, Deepak M Satwalekar and Omkar Goswami, saying that the duo has already completed nine years in that position, the maximum tenure prescribed by the corporate governance norms (Clause 49 of Listing Agreement). It is important that the norm is non-mandatory in nature as of now.

The company had 14 directors, eight of them independent, including Goswami and Satwalekar as on March 31, 2013.