Home » Behavioural Investing » Infosys Secret Sauce at Board Level. Why did they kick so much ass? $INFY

Infosys Secret Sauce at Board Level. Why did they kick so much ass? $INFY

Infosys (NYSE:INFY) has moved a lot of jobs from high wage to low wage environments. How did a bunch or foreigners do this? Everyone knows the company with the cheapest cost structure has the ultimate financial advantage.

How did they build a company of almost $30 Billion in market cap by destroying good paying blue-collar and pink collar jobs.

The board has thirteen members. Five of whom are active duty senior officers of the company. Eight are independent directors. The average age of the independent director is 59 and average tenure is 8 years. One women who clearly is a westerner. Two other men bring the western count to three. Most global companies are not that well diversified in global perspective.

Therefore you have to conclude that the rest of the board was exceptionally savvy about western economies and how to exploit the cost differential. The independents are:

Deepak Satwalekar 63 is a bank and money man. Managing Director and CEO of HDFC. Formerly with Standard Life Insurance. He has been a consultant to World Bank, Asian Development Bank and has developed an understanding of what have not economies can offer.

R Seshasayee 64 is the Executive Vice Chairman of Ashok Leyland from 1988 to 2011. He joined Ashok Lelyland in 1976 and therefore can be considered a car guy. Cars are global brands which have long been dominated by American Brands until they lost control of labour wages and quality.

Omkar Goswami 55 is a career economist and Chairman of the Investors Grievance Committee. As an economist in the Indian economy the question has been how do we achieve western standards.

Sridau Iyengau 64 was with KPMG from 1978 to 2002. He was a senior partner in both the US and the UK. He was also Chairman and CEO of KPMG India from 1997 to 2000. while at KPMG this man has had the inside seat at numerous western based companies and knew cost structures very well.

Ravi Venkatsen 49 was formerly the chairman of Microsoft India from 2004-2011. Prior he spent 17 years at Cummins Inc the engine people. MBA and Baker Scholar from Harvard B School started his very good appreciation of the western business world.

So while many would look at Infosys and see them as an opportunistic player, their board has an excellent savvy of western business constructs. The average western executive trying to operate in India spends more time stumbling about.

Now through in three western directors and the team becomes very strong.

Ann Fudge 61 the chairman and CEO of Young and Rubican Brands. She had earlier experience at Kraft Foods, General Foods, General Mills and was on the board of Federal Reserve Bank of New York. Harvard MBA to boot. Her consumer products experience rounds the financial operations expertise of her peers.

Jeffrey Sean Lehman 55 is a tax lawyer by profession. Professor of Law and Dean. His understanding of taxes would be key as you transfer cost inputs across political boundaries.

David Boyes 63 is a career IT guy. Formerly Chief Operating Officer of ANZ bank and previously was SVP e-commerce at American Express. Don’t believe he’s a Yank but western oriented does apply with a good understanding of Asia.

So yes it was all about the cheaper labour. But it took a western mind-set to put the game plan into play. This board has no difficulty understanding the West.

George Gutowski writes from a caveat emptor perspective.