Infosys announced the appointment of its co-founder and former CEO Nandan Nilekani as the non-executive chairman of the Board.
The presence of Nandan Nilekani, who was the CEO of Infosys during 2002 March to 2007 April, will assist the technology outsourcing company to manage business in the wake of the unexpected resignation of Vishal Sikka.
Infosys earlier appointed UB Praveen Rao as the interim CEO.
The Board accepted the resignation of R Seshsayee as its chairman and as a Director on the Board with immediate effect, as well of co-chairman Ravi Venkatesan though he continues as an independent director and executive vice-chairman Vishal Sikka with immediate effect.
Infosys also accepted resignations of directors Jeffery S. Lehman and John Etchemendy.
Nandan Nilekani, 62, who was CEO of Infosys from March 2002 till April 2007 and its vice-chairman, quit the company in 2009 to head the Unique Identification Authority of India as its first chairman till May 2014.
“Nilekani is an iconic leader, a successful entrepreneur and investor, and someone who has played a pivotal role in the country’s transition to a digital economy,” said the company in a statement.
Nandan Nilekani said he looked forward to working with his colleagues on the Board and in executive management on the business opportunities and delivering benefits to its clients, investors, employees and communities.
“The Board will consider a shareholder consultation process as a critical part of its overall engagement initiatives with all stakeholders that are being taken up on a priority basis,” he said.
He also thanked Sika for his service as the CEO over the last three years and wished him well in his future endeavours.
Seshasayee stated that Nandan Nilekani was the ideal leader for the company at this stage of its development.
“Nilekani’s appointment will allow the company to focus on the strategic changes it needs to make to capitalise on the opportunities in the years ahead. Under him, Infosys will build a cohesive management team that will take it to a leadership position in the industry,” he said.
Sikka said the company had found an ideal leader to manage the transition, as he would guide the firm to new frontiers of success.
“Last week I said that my remaining on the Board was to enable a smooth transition. In Nandan, we have found an ideal leader to manage this transition,” said Sikka, who resigned on August 18 as CEO and Managing Director three years after joining on August 1, 2014.
Lehman, who was to retire from the Board in April 2018, said with Sikka’s departure, the company was entering into a stage in which the time demands on independent directors would be compounded.
“In light of other demands on my time, I think it best if I accelerate my departure from the Board by a few months to allow a new independent director to start in this important role,” he said.
U.B. Pravin Rao, who will continue as Interim CEO and MD, said he was pleased to welcome back Nilekani.
“The Board will continue with its earlier stated plan to identify a permanent CEO and MD,” he added Rao.
Vishal Sikka termed his dramatic resignation as CEO of the global software major Infosys as one of the hardest decisions of his life.
“It was one of the hardest decisions of my life, but I feel that it had to be done,” Sikka, 50, told ‘Forbes India’ in his first interview since his decision to quit on August 18 caught stakeholders unawares and tanked the IT major’s stock to a three-year low of Rs 884.20 on the bourse.
Though the company’s Board accepted Sikka’s resignation, it appointed him as Executive Vice-Chairman on an annual salary of $1 till the new CEO takes over by March 31, 2018.
On his achievements, he said: “We grew revenues steadily while keeping a strong focus on margins, closing the first quarter of 2017-18 at 24.1 percent operating margin, beating our competitors for the first time in many years.” Meanwhile, revenue per employee grew for six quarters in a row.
Sikka however said that his departure would “not stall the company’s push into AI, automation, computing and data analytics”.
Asked if he thought Indian promoters found it difficult to give up control over a company after handing over the reins to professional CEOs, he said that he would not like to generalise or comment on it.
“I don’t think we can make generalisations of it. I want to say the world is going through profound change in terms of landscape, manufacturing, retail, telecom or even services, as everything has undergone seismic changes on the back of new digital technologies, computing and now AI,” he said.
On what he would do for the company as its Vice-Chairman over the next seven months of his tenure, Sikka said: “I want to help with the transition, find a good management team and help (COO-turned-interim CEO U.B.) Pravin (Rao) establish this.
“I also want to help institutionalise some of the initiatives and strategies, and maintain relationships with key clients, as Infosys is a people’s company and employees make it all matter.”
A doctorate in Artificial Intelligence from Stanford University, Sikka was inspired over two decades ago by the meteoric rise of the ‘Bengaluru Tigers’, Indian tech start-ups incubated by a bunch of smart entrepreneurs. Two of them were Infosys co-founders N.R. Narayana Murthy and Nandan Nilekani, who were also his heroes.
Known as a disruptor in the Silicon Valley for creating German tech giant SAP’s Hana platform, Sikka agreed to join Infosys on a call from its former Chairman K.V. Kamath in 2014, months after leaving SAP as its Executive Director.
When Sikka made a presentation on how to transform a traditional software services firm like Infosys, Murthy, who was then Chairman on return from retirement to revive the company’s sagging fortunes, liked it and hired him.
Sikka, however, expected non-interference and support from Murthy, and would have never imagined that three years after presiding over a massive overhaul at Infosys, which started showing results, he would walk away from the very thing that had consumed him, said the magazine.
“Ultimately, Sikka reached a point where personal attacks (by Murthy) took a toll on his ability to make changes. Even investors were disappointed by his exit, as he bolstered its shares 20 percent during his three-year challenging tenure,” said Forbes.
