Narayana Murthy on his son Dr. Roahn Murthy - VP.

Marathadi-Saamiyaar wrote:

.. "I wanted someone with an open mind, somebody who brought the finest ideas in computer science, somebody who has distinguished himself as a stellar academician to come and help me in improving our software delivery effectiveness. That is why I invited Dr Rohan Murty to come and join my office in terms of delivery effectiveness,"

Really?....why did he go to Cornell and not MIT or Stanford? Why would he not do his PhD at Cornell (#5) instead of shifting to Harvard (#20) ?  The guy is worth $600 mil and gave $20 mil to Harvard. Besides he is married to the rich heir of Amalgamations Group (TAFE, Voltas, etc.).  Naturally, shove all those crap about Principles and ethics and just become a "regular" desi dynastic businessman. At least he could have been honest and openly say he appointed his son as he was a major share holder.

Why all this open mind excuse and crap?

Rishi wrote:

Marathadi-Saamiyaar wrote:

.. "I wanted someone with an open mind, somebody who brought the finest ideas in computer science, somebody who has distinguished himself as a stellar academician to come and help me in improving our software delivery effectiveness. That is why I invited Dr Rohan Murty to come and join my office in terms of delivery effectiveness,"

Really?....why did he go to Cornell and not MIT or Stanford? Why would he not do his PhD at Cornell (#5) instead of shifting to Harvard (#20) ?  The guy is worth $600 mil and gave $20 mil to Harvard. Besides he is married to the rich heir of Amalgamations Group (TAFE, Voltas, etc.).  Naturally, shove all those crap about Principles and ethics and just become a "regular" desi dynastic businessman. At least he could have been honest and openly say he appointed his son as he was a major share holder.

Why all this open mind excuse and crap?

Saamiyaar,

Do you think Harvard would have been easy on Rohan in granting his Ph.D because of the $ 20 million donation?

Marathadi-Saamiyaar wrote:

Rishi wrote:

Marathadi-Saamiyaar wrote:

.. "I wanted someone with an open mind, somebody who brought the finest ideas in computer science, somebody who has distinguished himself as a stellar academician to come and help me in improving our software delivery effectiveness. That is why I invited Dr Rohan Murty to come and join my office in terms of delivery effectiveness,"

Really?....why did he go to Cornell and not MIT or Stanford? Why would he not do his PhD at Cornell (#5) instead of shifting to Harvard (#20) ?  The guy is worth $600 mil and gave $20 mil to Harvard. Besides he is married to the rich heir of Amalgamations Group (TAFE, Voltas, etc.).  Naturally, shove all those crap about Principles and ethics and just become a "regular" desi dynastic businessman. At least he could have been honest and openly say he appointed his son as he was a major share holder.

Why all this open mind excuse and crap?

Saamiyaar,

Do you think Harvard would have been easy on Rohan in granting his Ph.D because of the $ 20 million donation?

Definitely YES.

When a University gives admission based on family wealth and connections, it sure can give an easy degree as long as the guy is not a total dud. I heard UPenn gave a PhD to one such 50+ businessman who donated $10 mil. The faculty were opposed but the admin prevailed. The justification was that this guy would not be dong research and just wanted a title for the sake of his ego. So there was no harm or big deal about giving him a PhD.

Rohan could have easily fallen in that category. It takes more than the usual 4, 5, 7 years to get a PhD at Harvard, and this guy gets it in 3 years? rite.

Marathadi-Saamiyaar wrote:

.. "I wanted someone with an open mind, somebody who brought the finest ideas in computer science, somebody who has distinguished himself as a stellar academician to come and help me in improving our software delivery effectiveness. That is why I invited Dr Rohan Murty to come and join my office in terms of delivery effectiveness,"

Really?....why did he go to Cornell and not MIT or Stanford? Why would he not do his PhD at Cornell (#5) instead of shifting to Harvard (#20) ?  The guy is worth $600 mil and gave $20 mil to Harvard. Besides he is married to the rich heir of Amalgamations Group (TAFE, Voltas, etc.).  Naturally, shove all those crap about Principles and ethics and just become a "regular" desi dynastic businessman. At least he could have been honest and openly say he appointed his son as he was a major share holder.

Why all this open mind excuse and crap?

Rishi wrote:

Marathadi-Saamiyaar wrote:

Rishi wrote:

Marathadi-Saamiyaar wrote:

.. "I wanted someone with an open mind, somebody who brought the finest ideas in computer science, somebody who has distinguished himself as a stellar academician to come and help me in improving our software delivery effectiveness. That is why I invited Dr Rohan Murty to come and join my office in terms of delivery effectiveness,"

Really?....why did he go to Cornell and not MIT or Stanford? Why would he not do his PhD at Cornell (#5) instead of shifting to Harvard (#20) ?  The guy is worth $600 mil and gave $20 mil to Harvard. Besides he is married to the rich heir of Amalgamations Group (TAFE, Voltas, etc.).  Naturally, shove all those crap about Principles and ethics and just become a "regular" desi dynastic businessman. At least he could have been honest and openly say he appointed his son as he was a major share holder.

Why all this open mind excuse and crap?

Saamiyaar,

Do you think Harvard would have been easy on Rohan in granting his Ph.D because of the $ 20 million donation?

Definitely YES.

When a University gives admission based on family wealth and connections, it sure can give an easy degree as long as the guy is not a total dud. I heard UPenn gave a PhD to one such 50+ businessman who donated $10 mil. The faculty were opposed but the admin prevailed. The justification was that this guy would not be dong research and just wanted a title for the sake of his ego. So there was no harm or big deal about giving him a PhD.

Rohan could have easily fallen in that category. It takes more than the usual 4, 5, 7 years to get a PhD at Harvard, and this guy gets it in 3 years?  rite.

Then imagine what it does to self esteem, pride etc.

Don't you think he would feel "inferior" in the presence of guys who got their Ph.D because of their talent, hard work and brains?

And that inferiority comples would influence every decision he makes in his work and life.

Rishi wrote:
Then imagine what it does to self esteem, pride etc.

Don't you think he would feel "inferior" in the presence of guys who got their Ph.D because of their talent, hard work and brains?

And that inferiority comples would influence every decision he makes in his work and life.

Kris wrote:

Rishi wrote:

Marathadi-Saamiyaar wrote:

Rishi wrote:

Marathadi-Saamiyaar wrote:

.. "I wanted someone with an open mind, somebody who brought the finest ideas in computer science, somebody who has distinguished himself as a stellar academician to come and help me in improving our software delivery effectiveness. That is why I invited Dr Rohan Murty to come and join my office in terms of delivery effectiveness,"

Really?....why did he go to Cornell and not MIT or Stanford? Why would he not do his PhD at Cornell (#5) instead of shifting to Harvard (#20) ?  The guy is worth $600 mil and gave $20 mil to Harvard. Besides he is married to the rich heir of Amalgamations Group (TAFE, Voltas, etc.).  Naturally, shove all those crap about Principles and ethics and just become a "regular" desi dynastic businessman. At least he could have been honest and openly say he appointed his son as he was a major share holder.

Why all this open mind excuse and crap?

Saamiyaar,

Do you think Harvard would have been easy on Rohan in granting his Ph.D because of the $ 20 million donation?

Definitely YES.

When a University gives admission based on family wealth and connections, it sure can give an easy degree as long as the guy is not a total dud. I heard UPenn gave a PhD to one such 50+ businessman who donated $10 mil. The faculty were opposed but the admin prevailed. The justification was that this guy would not be dong research and just wanted a title for the sake of his ego. So there was no harm or big deal about giving him a PhD.

Rohan could have easily fallen in that category. It takes more than the usual 4, 5, 7 years to get a PhD at Harvard, and this guy gets it in 3 years?  rite.

Then imagine what it does to self esteem, pride etc.

Don't you think he would feel "inferior" in the presence of guys who got their Ph.D because of their talent, hard work and brains?

And that inferiority comples would influence every decision he makes in his work and life.

>>>>Years ago, there was an article in the WSJ on affirmative action, which pointed out (rightly)  the pitfalls of the AA program. I don't remember the specific details, but what I do remember is a letter from a reader which asked the WSJ editors if they had looked into another type of affirmative action, the one that involved family names and endowments that they themselves were probably beneficiaries of. The reader went on to say he had worked in Wall Street for several years and he could easily list a bunch of senior management guys who wouldn't have had access to their office buildings, much less jobs, were it not for their family connections.

Petrichor wrote:The issue is between NRN and the Board. In C-suites, people can choose whatever team they are comfortable with. Typical desi breast-beating and sanctimony here!!

truthbetold wrote:

Petrichor wrote:The issue is between NRN and the Board. In C-suites, people can choose whatever team they are comfortable with. Typical desi breast-beating and sanctimony here!!

one can identify this as nepotism .  nothing wrong with that either as long as murthy does not indulge in breast-beating about falling standards and morals.

Petrichor wrote:The issue is between NRN and the Board. In C-suites, people can choose whatever team they are comfortable with. Typical desi breast-beating and sanctimony here!!

Petrichor wrote:The issue is between NRN and the Board. In C-suites, people can choose whatever team they are comfortable with. Typical desi breast-beating and sanctimony here!!

Merlot Daruwala wrote:

Petrichor wrote:The issue is between NRN and the Board. In C-suites, people can choose whatever team they are comfortable with. Typical desi breast-beating and sanctimony here!!

That's true. Only, NRN is known for his holier-than-thou stance, positioning himself as a thought-leader on corporate governance in India. To see him go back on those very principles is a sad sad travesty.

Rishi wrote:

Merlot Daruwala wrote:

Petrichor wrote:The issue is between NRN and the Board. In C-suites, people can choose whatever team they are comfortable with. Typical desi breast-beating and sanctimony here!!

That's true. Only, NRN is known for his holier-than-thou stance, positioning himself as a thought-leader on corporate governance in India. To see him go back on those very principles is a sad sad travesty.

Very simple.

His son was very young when he was mouthing off all those platitudes about corporate governance, ethics, integrity etc.


NRN did not realize that one day his fatherly instincts will take over.

Petrichor wrote:1. Rohan's contract is for the same term as NRN's - 5 years. Expires in 2018.
2. Corporate Governance standards only focus on duty-of-loyalty. Nepotism, per se, is not a huge deal. Think of a manufacturing town where the bulk of the town population is employed at the local steel mill. You would have bunch of relatives, sometimes working in close proximity at the mill. You can extrapolate to the senior levels.
3. As long as shareholders get adequate value (returns), the Board should ensure duty-of-loyalty to the corporate interests in any employment contracts. That's it.

ps. why don't y'all find nepotism highlighted in a discussion of "corporate governance standards" and share it here!!!

Petrichor wrote:2. Corporate Governance standards only focus on duty-of-loyalty. Nepotism, per se, is not a huge deal. Think of a manufacturing town where the bulk of the town population is employed at the local steel mill. You would have bunch of relatives, sometimes working in close proximity at the mill. You can extrapolate to the senior levels.

Merlot Daruwala wrote:
For everyone else, it is an obvious breach of shareholder interest - and therefore a corporate governance issue - when the company's key executive roles are staffed by individuals whose sole qualification is their privileged birth. In this particular case, all those impressive educational credentials might qualify Dr Murthy to a professorial vocation, but not to be assisting at the helm of a complex corporate turnaround.[/font][/font]

Petrichor wrote:
PS. I think the current HBS, McKinsey type thinking is to work with family-owned firms without bothering too much about nepotism. Also see Ringling Bros. case for a detailed review of the concept of duty-of-loyalty.

Petrichor wrote:

Merlot Daruwala wrote:
For everyone else, it is an obvious breach of shareholder interest - and therefore a corporate governance issue - when the company's key executive roles are staffed by individuals whose sole qualification is their privileged birth. In this particular case, all those impressive educational credentials might qualify Dr Murthy to a professorial vocation, but not to be assisting at the helm of a complex corporate turnaround.[/font][/font]

If we are discussing nepotism in general (and no longer the INFY instance), then it my opinion that if the Board is satisfied that the beneficiary of nepotism will have his/her first loyalty towards the company's interests, the company's returns to shareholders will not be compromised (best candidate for the job after reasonable search etc.), there is no case to be made for inferior corporate governance. The larger the company, the more professional the management structure, the less it is an issue that the nephew of the managing director is supervising the mailroom.

In fact I would argue that the term corporate governance applies more towards protection of shareholders' interests, structure of board and other such weighty matters rather than piddly hire-n-fire decisions unless there is some kind of significant corporate liability.

Rishi wrote:

Merlot Daruwala wrote:

Petrichor wrote:The issue is between NRN and the Board. In C-suites, people can choose whatever team they are comfortable with. Typical desi breast-beating and sanctimony here!!

That's true. Only, NRN is known for his holier-than-thou stance, positioning himself as a thought-leader on corporate governance in India. To see him go back on those very principles is a sad sad travesty.

Very simple.

His son was very young when he was mouthing off all those platitudes about corporate governance, ethics, integrity etc.


NRN did not realize that one day his fatherly instincts will take over.

Petrichor wrote:And since when did company management become a popularity poll with shareholders voting their likes and dislikes of individual appointments?!!

Petrichor wrote:The Chairman of the INFY board doesn't think so and the board trusts him to make this call. Should INFY be beholden to every activist shareholder with minimal shareholding that has wannabe-aspirations to capture the mic and cry hoarse over sanctimonious vestiges of their OCD-addled interpretations of 'correctness' and their letters to editor?

Petrichor wrote:Does Rohan get a org chart under him? Have execs been made to report to him?

Petrichor wrote:Indians need to stop following Theory and try things out in Practice.

Merlot Daruwala wrote:
Another strawman. No, Infy is not beholden to anybody and Infy's Chairman is free to appoint whoever he likes as part of the Chairman's Office. Only, when the leadership talent in the company, including potential CEO-candidates start heading for the exits as a consequence of such coterie-building, and the promised turnaround of the company takes much longer - if ever, the markets will punish the stock with further derating and the Board will have nobody else to blame for destroying shareholder wealth but themselves.

Merlot Daruwala wrote:
Strawman alert. Shareholder views barely count for much in a country where promoter families rule the roost but nepotism certainly takes the sheen of a company's corporate governance record and the stock trades at a diminished "management quality" premium, if not an outright discount, vis-a-vis peers with a better record. Some day, when you are bored enough to come down from your ivory tower and get your lily-white hands dirty with stock analyses, you might discover that similarly-performing family owned companies routinely trade at a discount versus publicly owned, professionally run companies. Guess what is the difference between the two? Yeah. The same N-word that is not such a huge deal for you.

Petrichor wrote:2. Corporate Governance standards only focus on duty-of-loyalty. Nepotism, per se, is not a huge deal...

ps. why don't y'all find nepotism highlighted in a discussion of "corporate governance standards" and share it here!!!

Petrichor wrote:

Merlot Daruwala wrote:
Strawman alert. Shareholder views barely count for much in a country where promoter families rule the roost but nepotism certainly takes the sheen of a company's corporate governance record and the stock trades at a diminished "management quality" premium, if not an outright discount, vis-a-vis peers with a better record. Some day, when you are bored enough to come down from your ivory tower and get your lily-white hands dirty with stock analyses, you might discover that similarly-performing family owned companies routinely trade at a discount versus publicly owned, professionally run companies. Guess what is the difference between the two? Yeah. The same N-word that is not such a huge deal for you.

Family-owned is quite distinct from Family-managed. If you have any research on this super-granular attribution analysis of company performance due to 'management quality' and how to separate it out and refine it further into gaps between the nephew's  performance and another equivalent IIT-IIM race horse, please do share.

There are many examples of family owned and professionally run companies, both in India and other places.

Petrichor wrote:First, on conflict of interest: Yes, if the CEO appoints his son to a key position that is construed to be directly within the supervisory ambit of the CEO regular HR policies on conflict of interest would come into play. And if that son is merely the head of the mailroom, such conflicts could be wa(i)ved away.

Second, on the board composition: The Directors are agents of the shareholders. Whereas the people hired to work for the company are employees. INFY policy on board composition addresses not a conflict of interest or potential for flaw in duty-of-loyalty vows but a sensible approach to diversity of the Board and promote healthy board dynamics. Equally there are many family-owned businesses where this might not be the case and that in, and of itself, does not vitiate duty-of-loyalty standards.

Petrichor wrote:NRN is not an employeee. He is technically an agent of the shareholders. And he is an 'executive director' in that he has an executive contract with the board, for five years, to supervise and do what he deems fit. He hired a stenographer for his office and  he had hired another individual who he deems fit for 'his' office. This individual was then promoted by the Board to be a VP of the company. That individual also has 5 years of employment. I see no technical issue here so far.

If the main complaint is that NRN had said he will never hire his children and he has done so;
or INFY put out press releases or news conferences that they are 'different' and 'better' because of this prohibition on relatives, in the past;

then obviously that would be hypocrisy and I am not arguing against that at all.

Petrichor wrote:>>management team, i.e. employees

The terms are not synonymous. Executive directors may not be fired for cause. They may be relieved of their executive functions. They will continue to be directors i.e., agents of the shareholders. They can only be stripped of their directorship by the shareholders.

Petrichor wrote:And there are two very special contracts that he and his son have executed with the board that dictate how it will all pan out. Apparently the contracts have been filed with regulators there - wonder if it is public domain. Else, we will be speculating.