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In a surprise announcement, Infosys said V Balakrishnan will step down as Chief Financial Officer effective 31 October, and Rajiv Bansal, VP-Finance will take his place from 1 November. Bala (as he is called) will be in charge of Business Process Management (or Infosys BPO), Finacle and the India Business Unit. He will remain in the board of Infosys.
Bala's re-assignment is bound to be seen as a bad news for Infosys. He was great as a CFO. Many would agree to what Kris Gopalakrishnan said in a press statement: “Bala is one of the finest CFO in the country. He has led his team in setting new standards in financial reporting, corporate governance and compliance. A top performer, he successfully managed a high quality financial model which has withstood the pressure of the current economic downturn."
But I know some who will actually think of it as a good news. Those who think the problem with Infosys is its lack of aggression - in its pricing, in buying companies, in going after deals - usually end up pointing the finger towards Bala. One former Infosys executive, who described himself as conservative, said it's pretty hard to pass any deal through Bala. In August, Economic Times carried a story that on surface seemed to say Bala is in the running for the top job. But the story also painted a picture of a man who would say no to everything. "We would have said no to some 150 companies at least. Sometimes I tell Deepak (Deepak Padaki, head of M&A) that he should write a book on 150 ways to say no to acquisitions after he retires," Bala told ET. This at a time when Infosys was being accused of being too conservative.
One could argue that that's the role of a CFO, his main job is to apply the brakes (and leave the accelerator to those who run the business units). But, the concern was that he was too powerful within Infosys. Without a doubt, Bala earned that power - by tempering the enthusiasm of others in the team during good times, by making sure they did not overreach, by keeping the finances squeaky clean. The big question is whether that mix of power and conservatism was a good thing when the market had lost its momentum.
Infosys is yet to add anything more to what it said in the press statement. The details of the re-assignment will emerge during the course of the day. One thing is clear. His new role will give Bala an opportunity to show that he can handle the accelerators as well as he handled the brakes. That's a required skill for anyone who is looking at the top job.