A little over 36 years after he co-founded Infosys Ltd with six others and exactly a decade after he stepped down as its chief executive officer, Nandan Nilekani has returned to the company after he was unanimously named by the board as its non-executive chairman in a widely anticipated move.
The appointment, a significant victory for co-founder NR Narayana Murthy in his fight against the board of Infosys, will soothe the nerves of the company’s largest investors, who have been spooked by the events of the past week, during which Vishal Sikka stepped down as CEO.
R Seshasayee has resigned as non-executive chairman and Ravi Venkatesan has stepped down from his position as co-chairman. Venkatesan will retain his seat on the board as an independent director.
Sikka, who was appointed executive vice-chairman last week after he resigned as CEO, has also stepped down.
Sikka will receive a severance payout of $246,575, a variable pay of $205,572 and company-paid benefits for 90 days.
Infosys declined to comment on the tenure of Nilekani’s appointment as chairman.
UB Pravin Rao will retain his position on the board as well as his post of interim CEO.
Nilekani’s appointment has also brought about sweeping changes on the board, with the resignations of directors Jeffrey Lehman and John Etchemendy. Nilekani served as Infosys’s CEO from 2002 to 2007.
His comeback mirrors the return of Murthy in June 2013 when he was brought in to orchestrate a turnaround of the company’s flagging fortunes.
“I am happy to return to Infosys, now in the role of non-executive chairman, and look forward to working with my colleagues on the board and in executive management on the business opportunities we see before us and delivering benefits to our clients, shareholders, employees and communities. I thank Vishal for his service as the CEO of Infosys over the last three years and wish him well in his future endeavors,” Nilekani said in a statement.
Nilekani is expected to take charge of Infosys’s hunt for its next CEO and also help reconstitute the board of the company which has, over the past 18 months, come under fire for alleged lapses of corporate governance.
Mint had reported earlier on Thursday that Nilekani was likely to return as chairman and that he had insisted on a clean slate as one of the primary conditions for his return, raising the prospect of a massive overhaul of the board.
Earlier on Thursday, Mint also reported that the entire board, barring two directors, had offered to resign.
Mint also reported that Nilekani himself was likely to want to retain at least a few board members, such as Venkatesan and DN Prahlad, since he wants a functional board to start with.
“Nandan is the ideal leader for Infosys at this stage in the company’s development. His appointment will allow Infosys to focus on the strategic changes it needs to make in order to capitalize on the attractive opportunities in the years ahead. Under Nandan, Infosys will build a cohesive management team that will no doubt take the company to a leadership position in the industry. I believe these changes will infuse further confidence to the stakeholders in executing the transition plan and in reinforcing the strategy for the future,” Seshasayee said in the statement.