Narayana Murthy’s son joins; Is Infosys becoming family-run IT biz

Infotech Lead Asia: NR Narayana Murthy and his son Rohan Murty will be joining Infosys. Is Infosys becoming a family-run IT business?

Rohan Murty will be the executive assistant to Narayana Murthy, who will be taking over as executive chairman of the board and additional director with effect from June 1, 2013. Rohan will not have any executive leadership role.

Narayana Murthy, who will be returning to Infosy to bring back the IT company to better profitability and ensure revenue growth, will have five years’ tenure as the chairman. Rohan Murty’s term as executive assistant to the chairman would be co-terminus with that of Narayana Murthy.

Cognizant has become the #2 IT services company, ahead of Infosys. Cognizant experienced the highest growth rate among the top five providers with an increase of 20.1 percent in 2012.

TCS is the leading IT company in the IT services market in 2012, according to Gartner that released top 5 IT service providers in India based on their revenue market share.

Infosys board feels that Murthy’s entrepreneurial and leadership record and the long experience he has had as a technology pioneer makes him eminently qualified to lead the company and provide strategic direction at this point in time.

The top level reshuffling is important as Infosys’ growth suffered in the recent quarters. The IT firm posted a flat 0.3 percent revenue growth sequentially in Q4 2013.

Infosys registered 18 percent growth in revenue of Rs 10,454 crore for the March quarter compared to the same period last year. The second-largest IT firm’s net profit rose 3.4 percent to Rs 2,394 crore in March quarter and 1.1 percent sequentially.

Narayana Murthy said, “This calling was sudden, unexpected, and most unusual. But, then, Infosys is my middle child. Therefore, I have put aside my plans-in-progress and accepted this responsibility.”

Narayana Murthy intends to create the chairman’s office to assist him during his tenure and has requested the Board to permit him to put together a team for this function. The IT industry feels that the new chairman can bring back the lost glory. But there are several challenges. Competition has become aggressive in the last two years.

Rohan Murty, a Ph.D. in Computer Science from Harvard University, will be a team member of the chairman’s office. Rohan has a Bachelor’s degree in Computer Science from Cornell University and has held fellowships at MIT, Caltech, and Microsoft Research.

It seems family gets top priority at Indian IT companies. HCL Group recently said Roshni Nadar will be appointed as the chairman of HCL Corporation, the holding company for the HCL group. She will be one of the few woman chairpersons in India. Roshni will be taking over from her father and HCL founder Shiv Nadar at a time when HCL is looking for additional growth.

Interestingly, both the senior and junior Murthys will be taking Rs 1 as remuneration per year. This means, they will execute the growth strategy without remuneration.

Narayana Murthy will replace KV Kamath, who will step down from his position as chairman of the board and take up the position of lead independent director effective June 1, 2013.

“The board has taken this step keeping in mind the challenges that the technology industry and the company faces and in the interest of all stakeholders, particularly shareholders large and small, who have asked for strengthening of the executive leadership during this challenging time,” KV Kamath said.

S Gopalakrishnan would be re-designated executive vice chairman and will primarily focus on key client relationships and broader industry issues. SD Shibulal will continue to be the managing director and CEO. Shibulal’s term will expire in 2014. S Gopalakrishnan and SD Shibulal will also be drawing Rs 1 as their annual compensation.

Infosys is looking for a new CEO. Narayana Murthy can play a lead role in selecting the new CEO as well. He had earlier maintained that his family members will not be working at Infosys. But Rohan joined the company, though without executive leadership role. Hope Murthy and his Infosys family members can work wonders for Infosys again.

Baburajan K

[email protected]

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