HUMAN RESOURCE MANAGEMENT

CASE STUDY

Infosys, India-based Information Technology company (IT), suddenly recalled and reappointed its retired Chairman, N R Narayana Murthy (Narayana Murthy), to its Board as Executive Chairman and Additional Director with effect from June 01, 2013. Infosys, a global leader in consulting, technology, and outsourcing solutions, was started in 1981 by seven professional entrepreneurs led by Narayana Murthy with an equity capital of Rs 10,000. By the year 2000, Infosys’ market capitalization had reached Rs 11 billion. Narayana Murthy built an organization that was respected across the country and around the globe for its strong systems, high ethical values, and a nurturing working atmosphere. Infosys became one of the biggest exporters of software from India. The retirement policy at Infosys was as follows: The maximum age of retirement for executive directors was 60 years — which was the age of superannuation for their employees, the age limit for serving the Board was 65 years, and the age limit for the independent chairman was 70 years. Narayana Murthy had served Infosys since 1981 and retired in August 2011 at the age of 65 from active boardroom participation, in keeping with the company’s corporate governance policy. He took on the role of Chairman Emeritus of Infosys, a titular, symbolic, and non-executive position.

Answer the following question.

Q1. Identify the ethical implications if any for a leader if he/she chooses to return to the company he/she founded after a publicly stated retirement that was based on voluntary and well-intended retirement policies and good corporate governance principles.

Q2. Discuss the trust issues that arise if the leader returns to the company he/she founded despite the presence of many deserving and well qualified individuals within the company.