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Infosys CEO resigns amid public criticism from a founder

Infosys CEO Vishal Sikka steps down, with the company blaming criticism from a company founder for his decision

Infosys CEO Vishal Sikka has resigned from the company, citing criticism from the company’s founders for his decision.

Sikka, who joined Infosys in June 2014, wrote a lengthy resignation which he shared via Twitter. He said public criticisms of his methods have created an “untenable atmosphere”.

“After much contemplation, I have decided to leave because the distractions, the very public noise around us, have created an untenable atmosphere. I deeply believe in creating value in an atmosphere of freedom, trust and empowerment,” wrote Sikka in his resignation.

“Life is too short to engage in battles of opinions in the public – these add no value, take critical time and focus away from the business, and add more to the noise, to the eardrum buzz, as I wrote to you a few months ago.”

Founding chairman Narayana Murthy has been publicly critical of Sikka and Infosys. A statement from Infosys said the resignation is largely as a result of Murthy’s criticisms, which include comments on severance packages offers to departing executives as well as the acquisitions made under Sikka’s leadership.

Following the resignation, Infosys said in a statement: “[Narayana] Murthy’s continuous assault is the primary reason CEO Vishal Sikka has resigned, despite strong board support.”

“Mr Murthy’s campaign against the board and the company has had the unfortunate effect to undermine the company’s efforts to transform itself.”

According to Mark Lewis, outsourcing lawyer at Berwin Leighton Painsner, the affair is an example of conflict between different generations and business cultures.

“The letter from Vishal Sikka is quite extraordinary as yet another public outburst about inter-generational conflicts between senior management of some of India’s most admired companies and other corporate stakeholders and promoters, for example. It talks of personal attacks by the ‘old guard’ on the integrity of an incumbent, younger leader from the outside,” said Lewis.

Peter Schumacher, CEO at management consultancy the Value Leadership Group, said the circumstances surrounding the resignation are “very messy” and that it came as no surprise.

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According to him,  Sikka was seen as an outsider with a background in technology rather than IT services. Before joining Infosys, Sikka was SAP’s CTO and was notably associated with innovation around in-memory database Hana.

“While some voices say Sikka’s resignation could not have come at a worse time, the reality is that he was unable to resolve key issues plaguing Infosys – and has made many worse,” said Schumacher.

“Under Sikka, Infosys never met the ambition he set for the company. Clearly, his aspirations reflect a huge disconnect between his vision and reality that has proven to be too far to bridge.”

Schumacher said the search for a new CEO will be complicated by the rift between Infosys and one of its major shareholders. “Murthy’s uncompromising positions add stress that hangs over Infosys like a dark cloud. The ongoing rift between Infosys and Murthy will complicate the search for a successor.”

In a statement Infosys said: “Under the leadership of Vishal, [Infosys] has developed and articulated a strategy to transform itself to meet the rapidly changing needs of the marketplace in the 21st century. The company was lagging significantly behind industry in growth rates when Vishal took over, and now we are in top quartile from a performance perspective.”

Reacting to other criticism from Murthy, Infosys said it has continued to maintain the highest standards of corporate governance that it is known for.

“The board has sought the counsel of some of the most respected governance experts and legal advisors in the world, which have thoroughly investigated all anonymous allegations and concluded that no wrongdoing occurred. 

“For Mr Murthy to imply – with no evidence whatsoever – that three well-respected international law firms, members of the Infosys Board and certain employees are engaged in some grand global conspiracy to conceal information is not tenable on its face.”

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