Standpoint - Is Media Aiding Early Resolution Of Corporate Spats?

The recent months have seen two of India’s most respected corporates, the Tata Group and Infosys take to the media to draw stakeholders’ attention to internal governance issues and concerns. In both cases, the people involved were industry stalwarts, who are seasoned professionals with decades of experience and have weathered many storms. What then made these respected industry stalwarts expose serious internal issues through the media, rather than sorting them out through internal communication and discussion?

- Veena Gidwani

In the Ratan Tata-Cyrus Mistry ouster case, the Tata Sons’ board raised questions on the way the business was run and decisions taken. A lot of negative information was shared by both parties through front page stories in newspapers and prime time coverage on TV channels. Likewise, in the Infosys promoter group, led by N.R. Narayana Murthy, vs. CEO and board, issues pertaining to huge compensation to executives, acquisition strategy and appointment of independent directors were raised with the board. The promoter group claimed that the high governance standards of Infosys had been compromised.

In both cases, the persons who initiated the action, i.e Ratan Tata and Narayana Murthy, enjoy enormous brand equity, having steered their blue chip organisations to growth and success, along with demonstrating high levels of corporate social responsibility. On the other hand, Cyrus Mistry and Vishal Sikka, both very successful professionals with a proven track record, were relatively new to the respective companies. While the Tata-Mistry spat initially hit media because of the unceremonious removal of Cyrus Mistry as chairman of Tata Sons through a press release announcement, it developed into a full-fledged media battle with both sides proactively sharing information with the media that was not in the public domain, justifying their role and stand on the issue.