BANGALORE: Infosys, which on Saturday appointed KV Kamath as chairman in place of its iconic founder NR Narayana Murthy , will now draw up a succession plan for the eventual exit of all founders and the appointment of young professionals to run the company.
At 10: 50 am, shares of Infosys Technologies were trading 0.67% up at Rs 2925.50 on the Bombay Stock Exchange .
Kamath, whose tenure at ICICI Bank coincided with the appointment of many women professionals to important positions and who oversaw a similar succession at the bank during a troubled time in 2009, will help prepare such a plan, a person close to the development said. He will oversee the process of identifying and grooming people to fill important roles either at the board level or at the level of the management council, the software services firm's next big decision-making body.
ET was the first to report that Kamath was the front-runner for Infosys chairman's post in its edition dated August 16, 2010.
These managers could be given major responsibilities such as leading the company as the chief executive, becoming the COO or being appointed to similar senior roles at the board level, the person added. All this is expected to happen in the next five years and before the eventual retirement of Kamath from the company and that of the two founders - SD Shibulal and Kris Gopalakrishnan - from their executive roles.
"Forget charisma and clout, Infosys' biggest transition is when founders are gone, and that's why the company has picked Kamath, who has proven succession planning skills," said another person familiar with the process behind this appointment.
Infosys has been dogged by controversy over succession as time neared for Murthy's retirement from the company. He started the company in 1981 with money borrowed from his wife and is stepping down from all positions this year. So far, the company has followed the practice of allowing each of its major founder shareholders to take up the chief executive's position.
But this has had its share of problems. A senior Infosys director and a long-time Murthy confidante, TV Mohandas Pai, quit in a huff last month, saying the company should reward merit over seniority.
Murmurs of dissent at the Top management
There were murmurs of dissent among the senior management cadre over being ignored for bigger roles. On Saturday, in a partial acknowledgement that the problem was serious, Infosys said it will consider appointing some senior managers to the board before the next shareholders meet in June.
"Murthy is no mean planner - he was thinking at least five to seven years ahead when all founders would be gone and the board too will need new faces," said a person familiar with the decision-making at Infosys. "Kamath has been brought in to create a structure that gives Infosys a self-perpetuating board and management, the way Tatas are running their companies," he added, requesting anonymity.
Kamath's skills at pushing growth and getting his managers to capture market share are well known and ICICI Bank grew to become one of India's biggest banks during his tenure. But in Infosys, Kamath faces a different set of challenges. The old guard is exiting and a new set of leaders has to be found and groomed for bigger responsibilities. The transition also has to be done without causing resentment among employees and management and uncertainty among shareholders.
At 10: 50 am, shares of Infosys Technologies were trading 0.67% up at Rs 2925.50 on the Bombay Stock Exchange .
Kamath, whose tenure at ICICI Bank coincided with the appointment of many women professionals to important positions and who oversaw a similar succession at the bank during a troubled time in 2009, will help prepare such a plan, a person close to the development said. He will oversee the process of identifying and grooming people to fill important roles either at the board level or at the level of the management council, the software services firm's next big decision-making body.
ET was the first to report that Kamath was the front-runner for Infosys chairman's post in its edition dated August 16, 2010.
These managers could be given major responsibilities such as leading the company as the chief executive, becoming the COO or being appointed to similar senior roles at the board level, the person added. All this is expected to happen in the next five years and before the eventual retirement of Kamath from the company and that of the two founders - SD Shibulal and Kris Gopalakrishnan - from their executive roles.
"Forget charisma and clout, Infosys' biggest transition is when founders are gone, and that's why the company has picked Kamath, who has proven succession planning skills," said another person familiar with the process behind this appointment.
Infosys has been dogged by controversy over succession as time neared for Murthy's retirement from the company. He started the company in 1981 with money borrowed from his wife and is stepping down from all positions this year. So far, the company has followed the practice of allowing each of its major founder shareholders to take up the chief executive's position.
But this has had its share of problems. A senior Infosys director and a long-time Murthy confidante, TV Mohandas Pai, quit in a huff last month, saying the company should reward merit over seniority.
Murmurs of dissent at the Top management
There were murmurs of dissent among the senior management cadre over being ignored for bigger roles. On Saturday, in a partial acknowledgement that the problem was serious, Infosys said it will consider appointing some senior managers to the board before the next shareholders meet in June.
"Murthy is no mean planner - he was thinking at least five to seven years ahead when all founders would be gone and the board too will need new faces," said a person familiar with the decision-making at Infosys. "Kamath has been brought in to create a structure that gives Infosys a self-perpetuating board and management, the way Tatas are running their companies," he added, requesting anonymity.
Kamath's skills at pushing growth and getting his managers to capture market share are well known and ICICI Bank grew to become one of India's biggest banks during his tenure. But in Infosys, Kamath faces a different set of challenges. The old guard is exiting and a new set of leaders has to be found and groomed for bigger responsibilities. The transition also has to be done without causing resentment among employees and management and uncertainty among shareholders.
ANIMA SINHA
PGDM 2nd Sem
