V Balakrishnan, former chief financial officer and a shareholder in Infosys , has called upon company Chairman R. Seshasayee to quit and an interim chairman be appointed, which should directly engage with the founders and address their concerns.Speaking to ET’s Romit Guha, Balakrishnan said that the software company’s Board has been a big letdown and has let corporate governance and disclosures slip. He though said that the founders did not have issues with CEO Vishal Sikka or his strategy, but questioned the merits behind increasing his salary while other did not see similar rises. Edited excerpts:I think the Infosys board has been a big letdown. When large shareholders, who own a substantial stake in the company, who are iconic founders, who have built the company, when they raise certain governance issues, they should effectively address that. They have failed to address that, allowed the issues to linger on for so long, that it has had to come to this stage. Any professional board will directly engage with their shareholders.See what happened in Cognizant . A large shareholder writes a letter, the board directly engages with them, change the board, change the strategy and move on. That is what the Infosys board should be doing. It has been a big letdown. The board has failed in its duties.There are multiple things that have been happening for some time. There was some large compensation paid to employees when they left the company, the CFO, the general counsel. And the way increased Vishal Sikka’s salary, a substantial increase without any explanation.And there were a lot of other governance issues that the board has not handled well. Culture is very important for a company. If culture is gone, then everything is gone. That is why the founders engaged with the Board and told them certain things. But the Board did not address those issues. That is why it has come to this stage.Exactly. None of the board members have any history with the company, they don’t understand the legacy. Infosys was the golden standard for governance and disclosures in the country. Even if Infosys would have underperformed or over performed the industry, it has never let down any stakeholders on the issue of governance or disclosures.If you look at the last two years, the disclosure levels have been bad, the communication has been bad. They have never addressed any of the shareholders’ issue. Culture is getting diluted, the value system is getting diluted. That is the foundation on which Infosys was built. Naturally, the bigger shareholders being the founders are getting agitated that the culture on which they built the company is being compromised.No. This is not a fair argument. Because you have to look at the issue dispassionately. Founders are not saying your strategy is wrong. Founders are not saying Vishal Sikka is bad. What founders are saying is corporate governance is bad. The Board has not addressed governance issues. The disclosure levels are bad which are compromising the value system.If you bring in a professional CEO, he has to be given a free reign. That is what the Founders have done. They have never interfered in what Vishal is doing. This is an issue between the Board and the Founders.No. I don’t think there is any disconnect between Vishal Sikka and the founders. I think there is a disconnect between the Board and the Founders. Even the communications channel has broken. Why do you bring in a law firm to negotiate between the Founders and the Board? It’s a stupid thing to do. The Board should directly engage with the large shareholders.The Board has not understood the complexities. That is why I suggested that the Chairman should step down, because ultimately all the responsibility lies at the door of the Chairman, bring in an interim chairman and then talk to the large shareholders that is the Founders, address the concerns. If required change the Board and move on.Founders want the company to succeed. They want to support but you need an effective Board.That is one of issues, that you suddenly increase the CEO’s salary by 55-60% whereas the rest of the salary levels of employees have not gone up. And you don’t disclose to the stakeholders what basis the variable salary has been paid. You look at any global company, the CEO compensation is taken very seriously.In any compensation committee report, they say very clearly this is the variable component, this is linked to this target, and on achievement of this target, this will be paid. The Board has not disclosed that. The shareholders don’t know what targets is that the variable salary is linked to. There is a lack of disclosure.All these are optics. What the Founders are saying is, you pay $11 million or $20 million, whatever. But have you told the shareholders that this is the linkage of milestones to his salary. There is no transparency.If you just say revenue target of $20 billion by 2020 is linked to his salary, that’s not enough.The Board should so some maturity in handling an issue like this. They should not have allowed the issues to come up to this stage. This is bad for all stakeholders. I think some good sense will prevail and the Board should engage with the Founders directly.I think the first step should be for the Chairman to step down because the communication has broken down. Get an interim chairman. Let them talk to the Founders. If required reconstitute the Board, focus and address the issues at hand before they become much bigger. This is not the issue with the CEO or the strategy.The Tata thing is different. This is different. In the Tatas matter, I think they lost confidence in Mistry in the way the Group was being steered. There, it was a performance issue. Here’s there no issue with the CEO. It’s with the Board.I don’t think we will. We are more matured people . We know how to handle these kind of issues. I think the Board needs to see some sense and handle this much more elegantly. The way they have handled the issues so far is a big letdown, not expected from a professional board.The employees will naturally be demoralised. Employees have a lot of respect for the Founders. There is lot of emotional connect with the Founders. That is why the Board should step up and solve the issue at the earliest. Else, it will affect all stakeholders, shareholders wealth will get destroyed. Employee morale will be affected. This is not good for the company.Performance has been reasonably ok. It has been growing closer to the industry average. But as an outsider, we don’t get clarity on the way forward. There was a lot of talk about transformation.But we have not seen any big change happening on the ground. And even the acquisitions which have been done with a lot of fanfare, have not delivered much. And giving a vague $20 billion target of 2010, it looks highly unachievable at this point of time. The communication needs to improve, and they have to articulate strategy much better to shareholders.Vishal has come in just two years back. You have to give him some time. Performances can be up and down, that’s part of the game. But issue is that of the value system being eroded. If you look at history, Infosys has always commanded a 20-25% premium to other stocks , because people believed this is a safe stock, the governance standards are good, culture, value system are good.Today, the premium is gone. If even the company performs well, but the governance standards, culture and value system are gone, people won’t value the stock properly. I think that is the foundation of the company and that is why we are more pained as shareholders. The Board has been a big letdown.I hope not. I think some good sense will prevail at the board. They have not built the company, the Founders have built the company. They have the largest stake in the company. They want the company to succeed. They (Board) should understand that there is a trust deficit, and that it’s better for the chairman to step down, get an interim chairman, then the board engages with the Founders, addresses all the concerns, if required constitute the Board and move on. They should show maturity in handling such an issue. I don’t see that maturity currently.