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Infosys and the clash of the titans: is there a way out?

Tara Ollapally & Annapurna Sreehari
10th Nov 2017
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The Infosys dispute did not have the mediation of a trained mediator who could have navigated the dispute away from the public arena. The purpose of this article is to share a differing perspective on five features of mediation that would have made it a very appropriate forum for resolving this dispute.

 Disagreements are inevitable but the way we manage them is very much within our control. The past several months have been witness to the slow unfolding of the controversy at Infosys – the poster child of India IT Shining. Newspaper reports have been trickling in, one after the other, with new information being revealed, and every succeeding article remaining firmly divided on the issue. However, everyone concerned would agree that the dispute has cost the company immensely.

If we take a bird’s-eye-view of the situation, the crux of the dispute seems to arise from the differences in the value-system between the Founder-promoters of the company and the recently appointed Professional Managers of the company, with the Board split between the two factions. Employees who have worked with both Vishal Sikka, the ex-CEO of Infosys, and N. R. Narayana Murthy, have commented that the fundamental reason for the disagreements between the Founders and the Management has been personality clashes.

On the one hand, the new management, headed by Sikka, expected more freedom to steer the company towards better performance. On the other hand, the whistleblower email that raised issues about the recent acquisitions made by Infosys since February 2015, have raised concerns amongst the Founders about the increasing corporate governance issues in the company. Once the seed of doubt had been planted, the trust deficit between the Founders and the Sikka management increased exponentially, despite reported better performance by Infosys under Sikka’s guidance.

Most of the recent issues that have haunted the company seem to stem from inter-personal/value-based issues, exaggerated by misunderstanding. Values are beliefs that people use to give meaning to their lives. Values determine what is “right” or “wrong,” “good” or “bad,” and “just” or “unjust” in their eyes. Starkly different value-systems can give very different perspectives to the same situation. However, differing values need not lead to conflicts. Differing value-systems can, many times peacefully co-exist. Conflicts do arise when people attempt to force one’s own values on others. Mediation is a process that could have allowed the parties to manage their dispute in a more confidential, collaborative, respectful and honest way.

In mediation, a neutral third party trained in communication and negotiation techniques facilitates disputing parties to negotiate settlement terms that are mutually acceptable. Mediation is a science and art form that requires the skills of a trained and experienced mediation professional to help parties reach effective resolutions. It is unfortunate that the Infosys dispute did not have the opportunity of a mediation with a trained and experienced mediator who could have navigated this dispute away from the public arena in a far more effective and efficient way.

Whilst the intention is to not dwell into the intricacies of the Infosys dispute, the purpose of this article is to share a differing perspective on five features of mediation that would have made mediation a very appropriate forum for resolving this dispute.

  1. Confidential – A private process, mediation takes place behind closed doors, with the understanding that all communications that take place at the mediation – sometimes even the fact that the mediation took place – will be treated as confidential and privileged. As we have seen, spillover of boardroom disputes into the public arena greatly damages the reputation and business interests of the company. Mediation would have ensured that the Infosys Founders, the Management and the divided Board members would have had the opportunity to address all their issues in a private and confidential manner. Once misunderstandings have been clarified, all the stakeholders could have developed collaborative solutions agreeable to all. No dirty linen needed to have been washed in public. The most recent development that required Nandan Nilekani to publicly give the previous management that was involved in the Panaya investigation a clean chit, has further compromised the company as well as important relationships that hold the company. These issues could have been managed in a far more effective manner, if the key stakeholders had the opportunity to explore them in the confidential and safe environment of a mediation.
  2. Understanding Perspectives – Very often disputes are caused because of differing perspectives of the parties. R. Seshasayee, the former Infosys board member, believed that the company would face certain hiccups when it was transitioning from a Founder-led to a Professional-management-led company. On the other hand, Narayana Murthy had grave concerns about the corporate governance in the company and the rationale behind some of the company’s recent acquisitions. The mediation process is focussed on understanding the perspective of each party and the source of such a perspective. Similarly, the mediator also helps parties understand the other side’s perspective and why that has emerged. Once parties understand each other’s perspective, they move away from strong positions, cast less judgement on each other and are able to problem solve more effectively.
  3. Facilitated negotiation - When parties are unable to engage in a constructive negotiation, a neutral third party, i.e. a mediator, must be brought in to help the parties back into a constructive negotiation. One of the reasons for the parties’ inability to further engage in a constructive negotiation in a situation such as this, is the high emotional content in the dispute, which leads to breakdowns in communication. The neutral third party is trained in communication and negotiation skills. Using techniques like “active listening” “asking open-ended questions” “reframing” “summarising”, the mediator is able to address the emotional needs of the parties, identify information gaps, address barriers to negotiation and slowly bring the parties back into a constructive negotiation.
  4. Preserves relationships – Parties are encouraged to express their emotions, share their perspectives and take control over the outcome of the dispute. The process is inherently collaborative giving each party the chance to address core needs and find solutions that are mutually acceptable. In Sikka’s case, a core need may have been more freedom to manage the company, and Narayana Murthy’s core need, perhaps, was to see increasing accountability by the management and board towards the company.

The events that have unfolded in the recent past have damaged strong and immensely successful relationships. Nilekani, in a recent interview mentioned, “I would also like to acknowledge the leadership role Narayana Murthy has played in building this iconic institution and in corporate governance matters. Going forward, it is our endeavour to build a trusting relationship with Murthy.” Perhaps, this trust could have been built better in mediation, without the casualties of public humiliations, mistrust and multiple resignations at the top management and board level at Infosys. When disputing parties are able to collaboratively find win/win solutions after exploring underlying interests, relationships are preserved – very often enhanced – and paves the way for the “opportunities” that dispute situations bring

  1. Win/win solutions – Solutions that emerge from a collaborative process like mediation are usually win/win. Parties have the opportunity to explore individual interests and needs and find solutions that are acceptable and workable for all. Parties have complete control over the outcome and cannot be forced into accepting any terms of settlement. The process the parties have used to address the current situation at Infosys, while it may have tamed the fires, could hardly be considered win/win.

Given the high stakes involved, it is important that Company Boards are familiar with and use collaborative dispute resolution processes like mediation to address issues in a confidential, collaborative, quick, win/win way. Lessons must be drawn from companies like Walt Disney Co. that have used the services of professional negotiators and mediators to calm vicious boardroom situations. Companies like Infosys must have effective internal and external conflict resolution resources and systems in place that include access to trained and professional mediators to be able to prevent and if necessary, effectively manage boardroom disagreements in a collaborative way – it would save the company, our corporate community and the public at large much unnecessary loss and pain.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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