Board practices in India are evolving. There is a supply of talent. There is scale and speed that is taking place here. But there is a lot of catching up to do.
Best succession process takes place over a long period of time, says chief of executive research firm Spencer Stuart
As Spencer Stuart’s global chairman, Kevin Connelly has both a firm leadership role and client-facing responsibilities at the global executive search consulting firm. He is responsible for providing strategic perspective and is also an active search professional, consulting with clients on executive leadership succession and board projects.
Connelly was in Mumbai recently. In the midst of chairing a seminar and in-between meetings with corporate captains, he gave some time to DNA Money’s Satish John for an exclusive interview.
How is Spencer Stuart different from its peers?
I think the single biggest thing that is different about Spencer Stuart is that we are a global firm and hence can deliver globally. We serve many Indian corporates in Mumbai and across India for their operations around the globe.
Most boards of leading Indian companies lack the cosmopolitan character of a foreign company, even as they are aggressively spreading their presence globally?
We visited M Damodaran at Sebi. This was one of the topics that we talked about. The fact is that Indian companies can draw broader representation in their boards. That’s one of the things we will be doing in India.
We are going to publish a board index. The Indian board index and a dozen other board indexes, we publish in other countries is a very vigorous study of board room characteristics and board director compositions.
What do you make of many leading Indian personalities being co-opted on the board of global corporations?
None of the companies will appoint people on the board merely as representatives of a geography or country. If they are looking for expatriates is because they can contribute or add to corporate governance, debate and quality and so on.
It is true that many companies are eyeing the Indian market and therefore would like to have somebody who can come to the boardroom with a perspective in India. One of the big challenges for recruiting board directors is that people whom you want to generally serve on board are normally very busy people.
Do you see a dearth of adequate talent for the Indian boardroom?
I don’t see a shortage of talent in India. We just had a round table discussion with members if Indian business is interested in finding more people and that is good progress. It is our business to find good people. The challenge is out there.
How does the Spencer Stuart Index help an Indian company?
It is a way to hold together in a single place the number of critical dimensions of board composition and performance. If we talk about trends and where we are going, the real value is by providing a mirror to companies to compare themselves so that they can look at what other companies are doing.
In India there are quite a few CEOs who are due for retirement? They were indispensable and therefore got an extended tenure?
I am not personally familiar with those situations. Succession is something that we help companies with but there are many challenges. We recently worked with Merrill Lynch to recruit a new CEO.
It is better that companies could develop a number of succession alternatives internally and, in fact, many of our corporate clients do that and then they hire us to benchmark against the talent available internally against the external talent.
Do you have any Indian mandates?
We typically don’t talk about our clients. If our clients put it out like what Merrill Lynch put out then we acknowledge that. Generally speaking we don’t talk about the work that we do.
How many clients do you have in India?
We have a very good mix of large Indian corporates and MNCs.
What’s your advice on succession Indian companies?
At the risk of sounding self serving… Hire Stuart laughs.
Is it better to get an outsider to takeover as a CEO?
It is always better to have a third party like Spencer Stuart working with the board...to ensure that a very thorough and professional process is found. It is something we do all the time. Most boards that we worked with thankfully did it very seldom, something which we do everyday and for a living.
As is said before, the best succession process takes place over a long period of time. Good governance would suggest that the board is always reviewing the top levels’ succession plans and alternatives. Leaders are typically made and not necessarily born. They are put to the test over time.
Board practices in India are evolving. There is a supply of talent. There is scale and speed that is taking place here. But there is a lot of catching up to do.
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