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Murty's Infy role gets curious as firm says designation not final yet

At the time of joining, the company had said he will be Executive Assistant to chairman

BS Reporters Bangalore/New Delhi
Last Updated : Aug 25 2013 | 12:34 AM IST
The appointment of Rohan Murty, the son of Infosys co-founder and Executive Chairman N R Narayana Murthy, in the firm is getting curious.

Within hours of media reports saying Infosys had designated Rohan as vice-president, the Bangalore-based company came out with an official statement, saying: “Mr Rohan Murty’s appointment at Infosys is yet to be approved by the corporate affairs ministry. His designation will be confirmed once the process of appointment has been completed.” The statement gave no other details.

This looks like a deviation from the company’s stated line that Murty will work as ‘executive assistant’ to Narayana Murthy in the chairman’s office. The firm had also said Murty’s term as executive assistant to the chairman would be “co-terminus” with that of Narayana Murthy.

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According to Pawan Kumar Vijay, MD of Corporate Professionals, a legal and financial corporate advisory firm, the law says, if a promoter or a director of a company is appointing a relative, he needs approval from the corporate affairs ministry for it. The approval is mainly required in two cases: When the person is given a significant amount of salary or if the person is not being given enough compensation but is being given extraordinary powers in the decision-making process. “So, one needs to look at the terms and conditions to check what really is the approval for,” he added.

While announcing the decision to appoint Murty, Infosys had said he had asked for a salary of Rs 1 a year. Observers said Infosys’ decision to set a designation for Murty much after he joined the company appeared unusual, as the usual corporate practice was mentioning the designation in the offer letter.

The offer letter also, sometimes, defines the roles and functions of a stated designation, especially for senior positions like that of a vice-president.

On the other hand, while Infosys had said Rohan had been appointed as an executive assistant, the company had not made it clear if it was a designation or job role.

“Legally, what the company is doing is correct and may also get the approval from the ministry, but there is a question mark from the governance point of view,” said Corporate Professionals’ Vijay. He added this was because something else had been communicated when Murty joined the company.

“One should not take any pledge if he/she is not able to fulfil it. This leaves a lot to be read between the lines,” he added.

Narayana Murthy has said several times that his son’s induction into the company does not mean he will be given any leadership position.

“Rohan will be my executive assistant; he has no leadership role. Mr Shibulal is the CEO; there are executive directors on the board and they are all competent people. There is a very strong cadre of senior management at Infosys. Therefore, the only role Rohan has is to make me more effective,” Murthy had said in June at a press conference to announce his appointment as the executive chairman.

Industry observers, however, are of the view that a need to give Rohan a better designation might have arisen due to the role he was playing at the company. “As we understand, Rohan Murty is meeting clients with the chairman. So, keeping that in mind, it will be rather awkward to have an ‘executive assistant’ designation for him,” an analyst with a domestic brokerage said.

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First Published: Aug 25 2013 | 12:18 AM IST

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