One of Infosys's founding figures has returned to the board following a public spat between the company's co-founder, board and former CEO over governance issues.
The ascension of Nandan Nilekani to chairman of the board on Thursday prompted the resignations of current board chairman R Seshasayee, beleaguered former CEO Vishal Sikka, and two other board members. The move adhered to the wish of 12 institutional investors owning a 10 percent stake in Infosys, who on Wednesday called for Nilekani's return.
"Given his credentials, we feel, that his joining the board at this stage, will restore confidence of stakeholders in the company and also facilitate resolution of the contentious issues that Infosys is facing presently," the investors wrote in a letter.
Nilekani (pictured) co-founded Infosys alongside Narayana Murthy, served as CEO of the Bengaluru, India-based systems integrator from 2002 to 2007, and owns a 2.3 percent stake in the company. Murthy raised concerns over governance issues at Infosys, and claimed in recent emails that Infosys's independent directors felt that Sikka was more CTO material than CEO material, according to media reports.
Infosys's stock climbed $0.17 (1.15%) to $14.99 in trading Thursday, but is still trading $0.94 (5.9%) lower than it was a week ago prior to Sikka's shocking resignation. Sikka was replaced on an interim basis by Chief Operating Officer Pravin Rao, who will continue in that role until a permanent CEO can be found, which is expected to happen no later than March 2018.
"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," Sikka wrote in a letter to Infosys employees, which he shared in a blog on Aug. 17.
A group of Infosys founders led by Murthy wants the eventual removal of all but three directors of the 11-member board, according to a Bloomberg report Thursday. But the moves will take time since members are required to oversee audit and risk committees, among other responsibilities, according to the report.
Bloomberg said it's unclear whether the investor group clamoring for Nilekani's return to the board supports Murthy's broader aims. Infosys, for its part, said all four of the departing board members welcomed Nilekani's appointment.
"Last week, I said that my remaining on the Infosys board was to primarily enable a smooth transition," said Sikka, who had been set to serve as Infosys's executive vice chairman until a permanent CEO took office. "In Nandan, we have found an ideal leader to manage this transition."
Seshasayee has served on Infosys's board since 2011. Prior to that, he spent more than a dozen years as managing director of Indian commercial vehicle manufacturer Ashok Leyland.