IIMB’s Centre for Corporate Governance & Citizenship and All India Management Association host panel discussion on ‘Succession Planning in Boards: Better Ensure than Endure’ on Nov 24
Topics covered by eminent speakers include Boards succession planning; sustainability; diversity; selection process; succession planning in family managed businesses; managing Boards in the era of start-ups and digital transformation, etc.
26 November, 2021, Bengaluru: The Centre for Corporate Governance and Citizenship (CCGC) at IIM Bangalore, in association with the All India Management Association (AIMA), organized an online panel discussion on ‘Succession Planning in Boards: Better Ensure than Endure’, on November 24 (Wednesday), 2021, at 06.00 pm.
The panel featured a number of eminent speakers including: Harsh Pati Singhania, Vice Chairman & Managing Director, J K Paper Limited & Immediate Past President, AIMA; Prof. S Raghunath of the Strategy area of IIM Bangalore and Chairman, South Asia Board of the Academy of International Business; Shiv Shivakumar, Group Executive President, Corporate Strategy & Business Development, Aditya Birla Management Corporation, and Arun Duggal, Former CEO of the Bank of America in India.
Prof. Padmini Srinivasan, Chairperson, Centre for Corporate Governance & Citizenship and faculty in the Finance & Accounting of IIMB, while welcoming the speakers and the audience, gave an introduction to the event. “Today’s topic is very relevant to us as we at CCGC are involved in promoting Corporate Governance (CG) practices. Three aspects of the subject are very important to be looked into: ensuring continuity of business and reliance, the risk management perspective, and the Indian family business context.”
The discussion focused on topics such as Boards succession planning; sustainability; diversity; selection process; succession planning in family managed businesses; managing Boards in the era of start-ups and digital transformation.
The session was moderated by Sunil Kant Munjal, Past President, AIMA and Chairman, The Hero Enterprise. Pointing out that the very subject of CG is now under public glare, he said, “It has become necessary for Boards to look hard at themselves and make changes necessary to ensure that they are not just compliant – business should not be the only thing that the company does. Companies need to play an important role in society. The engagement between Corporates, government and the civil society has become very crucial today. The Boards need to spend more time on forward looking, strategic and sustainability issues. A good mix of backgrounds, professions, experience and exposure of the different members of the Board is the need of the hour. Gender bias needs to be corrected as well.”
Rekha Sethi, Director General, All India Management Association, too welcomed the speakers and participants, and introduced the guest speakers. “AIMA is delighted to partner with IIMB and hopefully this is just the beginning of many collaborations in promoting new management thinking and practices. I must highlight that Board succession is as critical as CEO succession. Very often Boards become clubby and barely change over long periods of time. The burden of organizational outcomes are transferred to the executives. But the pace and change in nature of business have now made it necessary to frequently refresh the Boards. The Covid crisis has also made it evident that we need to have the latest and multi-dimensional expertise to make companies resilient and agile.” Institutionalizing succession that is commensurate with prevailing and emerging market demands, bringing in diversity of Boards, induction of women, were some of the recommendations Rekha Sethi made.
Harsh Pati Singhania said it was his opinion that succession planning in India needs to be organic and organized. “Even for successful companies that is important and there is a method to achieve it. Moreover, Boards need to be diverse based on the kind of knowledge they bring. Board Directors need to recognize that running a company by any executive management is no easy task. Hence, Directors need to be supportive of management, and at the same time hold a mirror to the management to challenge them to perform better.”
Shiv Shivakumar spoke regarding attributes to focus on while filling up new positions in the Board. “The personality of the Board member, the character and communication skills, the culture fit with others on the Board, are important. Infusing the Board with new talent in the area of digital, consumer market, etc. should be the focus as well.”
Discussing the role of independent Board members, Arun Duggal said, “The performance and contribution of independent Board members have evolved (and still evolving) and have become more focussed, valuable and value-added in the last five or ten years.”
Prof. S Raghunath was requested to give his perspective as an academician and researcher on the issue that earlier Boards used to consist of a group of friends, and if that has changed now. Sunil Kant Munjal said that it is believed that if everyone is thinking alike, then no one is thinking out-of-the-box, which again leads to the thought if there was a shortage of quality independent Board members.
Prof. Raghunath responded by saying that there has been a sea change in the way Directors are being nominated to the Boards. “Boards have become very active in the arena of not just compliance, but are also responding to compulsions coming from technological changes, regulations and a lot more. Critical is the agreement on current skills and experience required at the top level to execute the company’s current and future strategy. A common roadblock is reaching a consensus on what the company’s long- and short-term strategy should be, which in turn will impact the choice made on succession. So, finding how the company’s strategy should reflect changes, and identifying skills and experience needed both at the Board level and top management level, are issues that companies today are grappling with. Board composition is undergoing gradual changes, and there is fresh thinking on how to lead the company into the future.”
Sunil Kant Munjal summed up by saying that the issues discussed were very critical to society as well as to business and industry. “We have covered start-ups, family-owned businesses, joint ventures, and large private enterprises. We look forward to discuss more about the public sector, as there is a serious implication of governance of that sector as well”.
YouTube link: https://youtu.be/6HLA0rGB1VI