Coming close on the heels of the Tata- Mistry corporate boardroom battle, the rift between founders and management of Infosys Technologies yet again raised concerns over corporate governance. Like the Tata-Mistry dual, the Infy saga ended up more like a clash between personalities with diverging views (in this case between founder N R Narayana Murthy and CEO Vishal Sikka).
Both companies were considered beacons of corporate governance and when media-shy promoters and professionals slugged it out in the open, the media went into an overkill, but paid little attention to the allegations. If proved, they lead to companies’ fall from grace. Take for instance, the Infosys battle.
When a respectable promoter like Murthy makes remarks of ‘hush money,’ paid to former CFO Rajiv Bansal, it isn’t coming out of thin air.
In 2003, it was based on Murthy Committee’s recommendations that Sebi revised governance norms. Incidentally, in Infy’s case, neither the promoters nor the management cleared the air whether the founders fi rst approached the board before going public.
While the management brushed it aside, questions persist about the manner in which the severance package was executed.
Similarly, months after Cyrus Mistry alleging Ratan Tata’s awareness in the Air Asia deal, nothing conclusive emerged. Board members come under scanner only when skeletons tumble out of corporate closets, but often emerge unscathed.
Despite missteps, corporate governance norms leaves much to be desired. While tightening of regulatory intervention in policing and punishment, apprehensions about founders’ excessive interference and dividing voluntary from mandatory exercise of opinion by independent directors is one thing, what is needed is a small corpus of legally mandated rules, buttressed by a larger body of self-regulation and voluntary compliance. In the end, good governance cannot be imported, but has to be developed internally.