The Reka Maximovitch-Phaneesh Murthy episode triggered a scandal in India Inc. But Infosys’ handling of it raises the bar for settlement of sexual harrasement cases in India writes SUCHETA DALAL
There is hardly any award for good corporate practices that Infosys Technologies has not won in the last few years. Forbes magazine has described it as ‘‘a model of transparency, not just for the rest of corporate India but for companies everywhere’’.
Phaneesh Murthy, as the marketing whiz heading the all-important US operations, was one of its brightest stars. He is credited with the phenomenal growth of its business in that country, which quite justified his Rs 1.92 crore monthly paycheck — among the highest in India Inc and about 10 times more than that of the Infosys core team.
The Vishaka judgment
A sathin working for a state-run women’s development programme in Rajasthan was gangraped by five upper caste men in 1992. It was followed by an appalling display of negligence and deliberate inaction on the part of the police, the medical personnel and the magistrate, all of whom went out of their way to prevent the sathin from registering her case and providing evidence. One question, which arose from the case was whether, apart from rape, the State could camouflage its own accountability in the matter, since the sathin had complained to the local authorities about the sexual harassment she faced.
So, who pays for sexual harassment?
When Infosys decided to settle with its former employee Reka Maximovitch at $3 million, plus nearly $1 million more in costs, more than half the money came from its insurance company. Infosys paid $1.5 million and Phaneesh Murthy, the accused, paid nothing.
How does insurance pay for charges of sexual harassment? An insurance company chief says that the Directors & Officers (D&O) liability policy covers all named and unnamed people in a company from risks and liabilities associated with their work including gender, sexual and racial discrimination and harassment.