Mavinakere studied engineering and then did his MBA before joining ICICI Bank on the credit side in 1991. He took on leadership roles in the areas of treasury and planning at the bank. He joined Infosys in 2000, initially in financial services consulting, with some of India’s largest banks as clients. Then, in 2008, he was appointed Chief Risk Officer (CRO), a role that was yet to evolve in those days. As a result, he had to conceptualize what enterprise risk management is.
“We worked toward making risk management a centerpiece of our discussions and deliberations,” he recalls. “It was not just about financial risk. We also looked at strategic risk and the external regulatory environment. In fact, we looked at the risks to strategy execution.”
According to Mavinakere, strategy is all about decisions. “When you make a choice, there are certain risks you automatically get exposed to,” he explains. In the case of Infosys, the majority of the organization’s markets are outside India, so it automatically exposed itself to foreign currency risks.
The CRO role gave Mavinakere a well-rounded perspective on governance, audit and compliance. This also helped him, and thereby Infosys, to weather the global financial crisis without much credit loss.
“Back in 2008, one-third of our revenues came from banks that were in distress,” he says. So the biggest risk facing Infosys was receivables.
In early 2008, Mavinakere’s team began keeping a close watch on the credit default swap rate of every large client, particularly these banks – and not just their credit risk ratings.
“This gave us a six- to eight-month headroom to plan things out, direct all our collection efforts of receivables, or request progress payments and mitigate our risks by not taking on more projects for them,” says Mavinakere.
As a result, the actual credit loss for Infosys during the financial crisis was negligible. This attracted the interest of Robert S. Kaplan, an accounting academic at Harvard Business School, who invited Mavinakere to talk about how Infosys was managing the global financial crisis at the school’s centenary celebrations in 2008.