Debate over promoter vs outsider for top job

New Delhi, August 18 

The promoter-versus-outsider debate has returned to the fore on running a blue-chip enterprise in India with experts blaming differences between the top management and some founders for Vishal Sikka quitting as Infosys CEO.

Sikka took charge as Infosys’ first non-founder CEO in 2014, prior to which the top post at the company was held by one or other founders of the country’s second largest IT firm.

The company today announced a surprise resignation by 50-year-old Sikka, who cited “a continuous stream of distractions and disruptions” for his decision, while the Infosys Board was direct in blaming “continuous assault” and “campaign” by founder and ex-chairman NR Narayana Murthy.

A large number of Indian blue-chips are run by promoter family members and include Bajaj, Hero Group, Bharti, Mahindras, Dr Reddy’s, Lupin and Sun Pharma.

While several of these appoint professional outsiders as CEOs and for other top positions, the top-most executive positions (including as Executive Chairperson) are held by the promoters.

At the same time, there are also large groups like ICICI, HDFC, ITC, L&T and Axis Bank where the top-management positions are held by non-promoters and for several years together without any disruptions in several of such cases.

At several family-run companies, children are groomed as successors and some of the examples are Reliance,  Wipro, Godrej, Cipla and Adani. — PTI

Second high-profile exit after Mistry

• This is the second high-profile exit of an ‘outsider’ from the top post of a big enterprise in India, after Cyrus Mistry was removed as the head of Tata Group
• While Mistry’s family has a significant stake in Tata Sons, he was still seen as a non-Tata