By Tanya Agarwal
After nearly three months of searching and vetting about two dozen eligible candidates, Infosys announced Mr Salil Parekh as its CEO on the 1st of January, 2018. Often described as soft-spoken yet extremely determined individual, Parekh’s experience with working in multi-cultural environments makes him a good fit for the position.
After a prolonged deadlock with investors, former CEO Vishal Sikka resigned rather abruptly in August 2017. Many of his associates, including N R Narayan Murthy, were accused of poor corporate governance and awarding themselves hefty remunerative packages. However, Sikka described his own resignation as the result of, “a continuous stream of distractions and disruptions over the recent months and quarters, increasingly personal and negative as of late, as preventing management’s ability to accelerate the company’s transformation.”
An academic and business background
Salil Parekh, 53, was earlier an executive board member with the global consulting firm Capgemini. Nandan Nilekani, Chairman of the Board, said in a statement last month that Parekh has a strong track record of executing business turnarounds and managing very successful acquisitions. “The board believes that he is the right person to lead Infosys at this transformative time in our industry.”
Kiran Mazumdar-Shaw, Chairperson of the Nomination and Remuneration Committee, said that Parekh was selected after a comprehensive global search effort and was the top choice out of a pool of highly qualified candidates. The new CEO has a Master of Engineering degree in Computer Science and Mechanical Engineering from Cornell University, and a Bachelor of Technology degree in Aeronautical Engineering from the Indian Institute of Technology, Bombay.
Effect on the Stock Market
After Parikh took over as the CEO of the IT giant, the shares of Infosys continued to trade flat. The scrip was trading -0.04% or Rs 1,034.10 at around 10.10 AM (IST). Shares of the company opened at Rs 1,037.20 and have touched a high of Rs 1,043.40 and a low of Rs 1,031, respectively. The benchmark BSE Sensex was down 68 points or -0.20% at Rs 33,744 at around the same time. Shares of the company had hit their 52-week high of Rs 1,046 on December 29, 2017, and a 52-week low of Rs 861.50 on August 22, 2017. The company has now decided to announce its third-quarter financials on the 12th of January, 2018.
Following a period of unstable leadership at the USD $10 billion company, the biggest challenge faced by Parekh is to re-establish equilibrium. Apart from this, the new CEO will also have to focus on hiring determined individuals for digital technology and sales roles as Infosys and the rest of the IT industry finds itself at the epicentre of a transforming market.
Along with that, another key challenge Parekh will face is retaining talent. Sikka’s departure rattled the rank-and-file and senior level executives alike, who are critical to rolling out the company’s strategy and retaining clients. Salil Parekh will have to ensure the smooth transition of the organisation to a new era of corporate management. However, being an outsider, that transition will not be easy.
Featured Image Source: Wikimedia
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