The sponsor-led company retains non-executive directors, chairpersons to guide, board decision-making

Mumbai: Promoter-led companies continue to retire executives, such as CEOs, MDSs and CFOs, by reappointing them as non-executive directors, chairmen or board advisers as they navigate in an increasingly complex and challenging market environment.

The ongoing engagement of these experienced leaders is seen as a means to protect institutional knowledge, maintain strategic continuity and add depth to board decisions while allowing executive director leadership without intervention.

Former Tata Motors CEO Guenter Butschek has become a non-executive, non-independent director of the company. Bharat Puri, who recently served as Pidilite MD, was retained as a non-executive, non-independent director. Former Jaguar Land Rover CEO Thierry Yves Henri Bollore is now the non-executive chairman of group company Tata Atocomp. Grasim Industries, former MD HK Agarwal, is a consultant to the company’s board of directors.
Balanced behavior
The Aditya Birla Group led by Kumar Mangalam Birla recently appointed Praveen Maheshwari, who retired last month from the role of Hindalco CFO as a consultant or non-independent director.

A consumer group chairman said multinationals tend to have a trading equation with their management, while Indian promoters continue to leverage their talents’ expertise and knowledge, far beyond the scope of the formal retirement era.
“Our group sponsor consulted with directors of all the former major decisions before making the final call,” said an executive of a Mumbai-based metal group. “He is like a troubled shooter and his guidance is taken seriously.”
These retired senior executives have years of experience that brings a wealth of knowledge that may help overcome strategic challenges and navigational barriers. However, their participation needs to be carefully managed to avoid hindering new leadership and induction of new ideas. A former MD took on a consulting role, which shows that the key is to maintain balance, and the new management team is not overshadowed by the existence of retired executives.
“It is crucial that retired executives stay open to new ideas and demonstrate a willingness to learn to ensure that their contribution complements rather than undermines the organization’s sustainability,” he said.