Infosys' Ultimate Slap in the Face to the U.S. Government

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In an almost incomprehensible display of hypocrisy at a time when a multi-agency U.S. government investigative force is in the final stages of gathering and processing damning evidence of criminal behavior on the part of Infosys and a number of its employees, a top Infosys executive is speaking publicly about the exemplary nature of the company's business ethics and the strength of its "value system."


A Feb. 13 article on India's Business Standard website, titled "Investing in an Ethical Corporate Culture," includes a contribution on ethical corporate behavior from Infosys co-founder, co-chairman and former CEO Kris Gopalakrishnan. It was under Gopalakrishnan's watch as CEO that Infosys employee and whistleblower Jay Palmer was harassed and retaliated against for using the company's established internal mechanism to report the rampant visa and tax fraud he discovered, and under which the culture of violating U.S. visa and tax laws flourished. So Gopalakrishnan's self-righteous preaching on corporate ethics could not have been more distasteful. Consider this excerpt from his sermon:

We at Infosys, strongly believe that corporate governance is not just a "compliance" matter, instead is integral to our value system. In my view, effective corporate governance enhances competitive advantage of a corporation in the long term. Management in corporations with good governance understand that they are merely trustees managing the affairs of the company in the best interests of all the stakeholders. At Infosys, we have consistently followed highest level of disclosure to stakeholders, both financial and non-financial, so as to minimise asymmetry of information between stakeholders and management. We follow the adage "when in doubt, disclose. While percolating good governance across the corporation, it is important to focus on enhancing the ethical judgment of employees, managers and executive board members, in the same way that they focus on developing technical and skill-based competencies. Organisations with good governance recognise and realise that it is their people, not regulations, that run the company and the measure of success in this area is the sum total of several day-to-day decisions taken by the management and employees at every level. At Infosys, senior management regularly conducts value workshops to reinforce ethical conduct. Consequences of non-compliance is explicitly made known to every employee joining the company. It has been rightly said that the "tone" of good governance is set right at the top and flows all the way down the organisation leaving no one out -- from chairman to doorman! Long-term sustainable growth is all about a commitment to values and ethical business conduct. It encompasses laws, regulations, processes and practices affecting the way a corporation is directed, administered, controlled and managed.

If that were the absolute epitome of blatant, shameless two-facedness, the pice de resistance was Gopalakrishnan's conclusion:

Longevity of a corporation depends on the faith of its stakeholders in the governance practices. Good performance, not combined with good governance, will not be palatable to the investing community. Employees will think twice before joining companies which don't have good governance practices. Customers will shy away from companies that don't follow the rules. Society will not respect companies which don't follow the best practices. Only those companies that earn respect from all stakeholders will survive in the long run.

So I have a suggestion for Gopalakrishnan and his cronies. As U.S. government officials deliberate on what measures to take against Infosys, and whether to indict certain individuals within the company, the senior management team would be very well advised to demonstrate a little humility and remorse, and to tone down the presentation of that nauseating ethical faade for a while. The combination of arrogance, hypocrisy, dissemblance and denial that Infosys continues to display is a slap in the face to the U.S. government, and, by extension, to the people of this country. Call it a hunch, but I think the feds might be getting a little fed up.