Much has been written about this in past few days and even more remains to be known. Most importantly, who can the Board find quickly to replace the outgoing CEO; emphasis being on the word quickly. Each passing day, competitors will do all they can to reach out to existing clients of INFY with better value propositions. If anyone has a doubt that some of the clients will leave the Company, then he may well doubt if there ever is a need to have a CEO in the first place.
That the relations between the founders and the current management / Board were not the most cordial was well known. A few days ago, I was informed of this by no less than a major service provider to Infosys. This is never a good sign; when your clients and customers get more than a whiff of what was going on inside.
Let me add. + Infy is facing its own internal problems with founders and management. Buy Infy https://t.co/4T1KtY5G16
— Rajat Sharma (@SanaSecurities) August 10, 2017
May be Vishal realized that it was not as easy as he thought to transform Infosys from its traditional business into a more digitally oriented technology. May be NRN is really planning to take a more active role, even though this may be a very bad idea no matter whose view you take on this.
Really who knows what transpired over the past few days. May be the board has already spotted someone better to replace Vishal . . . . . I mean the problems have been fairly public for over a year now. In fact, I am certain that they have a few names in mind.
Here’s what I do know, the way this resignation came about has altercation and vendetta written all over it. Of course this is in addition to a complete lack of fiduciary duties. The decision was made public just before Indian markets opened for trade on Friday, when it could have easily been done over the weekend. Infosys trades on Indian exchanges as also on the NASDAQ. How would the management / Sikka be harmed in anyway if they made this resignation public after trading for the week had ended on both the exchanges? Did they want a sudden fall in stock price on one of the Exchanges? Of course, even disclosing this on late Friday evening would have caused some disruption for Monday morning but at least the board would have had some more time to prepare better. If this doesn’t show bad vendetta, nothing else does.
As a shareholder you should worry not about clients being lost or a lack of leadership, the biggest worry is of class action suits in the United States. Unlike India, bad governance is not taken lightly in some other countries, U.S. being one of them. Further, obviously many others would have known of this decision. Their role in terms of helping with a smooth transition will certainly be questioned.
In fact expecting a CEO to leave after finding a suitable replacement is not out of line or is it? Specially when the CEO claims to love the iconic brand that is Infosys, by his own admission. I am not sure what he will achieve as a vice president now that he could not have achieved as the CEO.
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