Last year, Infosys told shareholders that activist shareholders were one of the challenges, as the company said: “Actions of activist shareholders may adversely affect our ability to execute our strategic priorities, and could impact the trading value of our securities.”

Now, Infosys, under new CEO Salil Parekh and non-executive chairman Nandan Nilekani, appears to have taken the responsibility, partially, on itself to face this challenge.

“Attempts to fully address concerns of activist shareholders may divert the time and attention of our management and board of directors and may impact the prices of our equity shares and ADSs (American depositary shares),” Infosys said in its 2017-18 annual report.

Infosys calling out activist shareholders as a risk last year caused much consternation among its promoters after this paper reported that it was aimed at some of its founders, including N.R. Narayana Murthy, who had repeatedly questioned some of the decisions made by the board.

Then, Infosys denied that the insertion of this clause was aimed at any particular group of investors, with former chairman R. Seshasayee telling shareholders in the annual general meeting in June that “any inadvertent pain (to founders)” was “sincerely regretted”.

But Seshasayee’s apology was too little, too late, as two months later in August, the 18-month-long feud between the then board and Murthy culminated with both CEO Vishal Sikka and Seshasayee stepping down.

Understandably, at least one proxy advisory firm believes that Infosys’s new statement underlines a more pragmatic approach under Nilekani as Infosys looks to avoid any confrontation with any group of shareholders.

“Infosys believes it is vulnerable after the Cognizant episode (In November 2006, activist shareholder Elliott Management pushed Cognizant to get rid of what it felt was an “antiquated, growth-at-all-costs” business model, and focus instead on total shareholder returns). It (Infosys) believes dealing with activist shareholders can take a lot of management bandwidth,” said Shriram Subramanian, founder and managing director of proxy advisory firm InGovern Research. “Last year, it appeared to be targeted at one specific group, the founders, while now the board has left it more generic and even admitted that it needs to work on it, which I believe is a more pragmatic approach. Also, unlike last year, the management and board are not at loggerheads with any group of shareholders”

For now, Infosys is the only large information technology (IT) outsourcing firm that cites engagement with activist shareholders as a risk factor.

Cognizant CEO Francisco D’Souza in an interview last year said that the management does not subscribe to the view that any of its shareholders are a risk and rather “shareholders are owners” of the company.