Business Case Studies,Corporate Governance & Business Ethics Case Study, Infosys: Return of N R Narayana Murthy

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Infosys: Return of N R Narayana Murthy



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Code :HRM0084

Year :
2014

Industry :Information Technology and Consulting

Region : India

Teaching Note: Available

Structured Assignment : Not Available

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Introduction:Infosys, headquartered in Bangalore, India, was a global leader in consulting, technology, and outsourcing solutions with more than 155,000+ employees and US $7.4 billion in annual revenues as of March 31, 2013 . But Infosys had been going through a troubled patch since 2009. It saw a decline in its net operating profit after tax (NOPAT), a slower phase of growth than the industry, and the loss of its No 2 position in the infotech industry to Cognizant Technology Solutions (Cognizant) in 2012. Meanwhile, N R Narayana Murthy (Narayana Murthy), a post graduate from the Indian Institute of Technology Kanpur and one of the co-founders of Infosys, retired as Chairman in August 2011 after he turned 65. This was in line with the policy he had articulated and which Infosys had followed in letter and principle. At the time of his retirement, Narayana Murthy had been with the company for 30 years

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But in a surprise move, the Infosys board appointed Narayana Murthy as Executive Chairman of the Board and as Additional Director of Infosys with effect from June 1, 2013. Further, Narayana Murthy requested the board to appoint his son, the Harvard educated Dr. Rohan Murty (Rohan), as his executive assistant. Rohan was to have no leadership role, but was to assist him during his tenure. The board readily agreed. However, Rohan’s appointment gave rise to discontent among the advocacy groups and analysts and criticism about Infosys and its corporate governance policies with a few wondering whether the company had done the right thing in recalling Narayana Murthy. But the investors were happy with the decision. According to Rostow Ravanan (Ravanan), Co-founder and CFO of Information Technology Consulting company, Mindtree, “Mr. Murthy is one of the most respected, credible, capable leaders in corporate India right now. His comeback will definitely make big benefits to Infosys.”

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