Snapdeal to Infosys: India Inc's boardrooms face testing times

As custodians of both the legacy and the future of the companies they helm, board members have their tasks cut out for them. Their discipline and integrity will be tested

Harichandan Arakali
Updated: Apr 7, 2017 07:29:15 PM UTC

I'm the Technology Editor at Forbes India and I love writing about all things tech. Explaining the big picture, where tech meets business and society, is what drives me. I don't get to do that every day, but I live for those well-crafted stories, written simply, sans jargon.

Image: Shutterstock (For illustrative purposes only)
Image: Shutterstock (For illustrative purposes only)

Boardrooms in India Inc have been particularly in the news over the last several months, across the spectrum — from one of the largest conglomerates in the country, to a highly respected listed member of the stock exchange’s main index in Mumbai, to an internet-age startup unicorn.

From the Tata Group to Infosys to Snapdeal, board-level tussles have given much grist to the scribe’s mill. While the Tata Group, having ousted Cyrus Mistry as chairman, moved swiftly to resolve much of the resultant turmoil, naming the highly respected N. Chandrasekaran to the position, readers continue to be entertained or bemused by the goings on at both Infosys and Snapdeal.

At the former, a high-power press conference two months ago by the entire board of the IT services giant now seems to have done little to end differences with iconic founder NR Narayana Murthy.

Murthy’s latest salvo in the press, in a letter questioning COO Pravin Rao’s pay hike, which the founder abstained from voting on, compelled Infosys to defend itself. CEO Vishal Sikka and the board, led by Ashok Leyland veteran R Shesasayee, once again, defended their various actions and this time, the increase in Rao’s salary, in a statement. Clearly, the rift with Murthy, a minority shareholder now, is far from bridged.

What has changed now, however, is that more investors have openly spoken out against the actions of the man, who, alongside Azim Premji and FC Kohli helped build much of the foundation of India’s IT services industry — today an $150 billion sector.

At Kalaari Capital, one of the early venture capital investors in Delhi’s Jasper Infotech Private Limited, which runs the online marketplace Snapdeal, Managing Director Vani Kola didn’t mince words, when this writer emailed her to ask for a meeting. This was for an update on talks, which multiple media reports, including at Forbes India, suggest will likely end with Snapdeal being sold to larger rival Flipkart.

Kola declined to meet or comment at this juncture, but added “What about writing if ‘India Inc’ didn't maintain board confidentiality? Can we build any progressive and sustainable business culture if we violated the very norms and ethics that is the backbone of trust?”

And her contention is sophisticated: Even though, some of those leaks have helped paint Kalaari and Nexus Venture Partners, another VC investor in Snapdeal, as the ones holding out, the ones whose demands are coming in the way of Snapdeal’s sale; it is the idea that board discussions, which she sees as private and sacrosanct in protecting shareholder value, are being leaked that angers her so — even more than the content of the leaks. The sale is now widely believed to be brokered by SoftBank Group Corp, which is said to own a third of Snapdeal.

Kola added in her email: “In fact if people entrusted with responsibility are irresponsible in contributing to leaks, that is the real story to write about.”

And boardroom disagreements are out in public in the news, even at listed companies we all want so much to admire, this writer pointed out. Kola’s response: “Who benefits? Lawyers? Media companies? In fact the shareholders lose a lot when this happens. And does anyone respect this behaviour, NO.”

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