Ranbaxy is unique in the Indian context wherein the promoters have displayed an extremely professional attitude in drawing a clear demarcation between ownership and management. This article revolves around the crux of CEO succession planning, which involves the process of identifying a person who is professionally competent to don the mantle of a CEO, as against an individual occupying the top slot by virtue of being the heir to a majority stakeholder. The issue of holding the reigns of power continues to hold centerstage whenever the topic of succession comes up in all family managed businesses. While the shareholding pattern governs the controlling power, it does not necessarily translate into wealth generating power.
In the present global scenario, business families cannot continue to operate in the manner they have been doing for the past half a century. With the advent of liberalization and opening up of the Indian economy resulting in availability of and access to varied sources of funds, it is imperative that the management vests in the hands of top-notch professionals. With listing options on the bourses of international markets, pandering to the needs of FIIs (Foreign Institutional Investors) is of paramount importance and can be catered to only by professional and highly skilled managers. It is a moment of reckoning for the family managements to decide on the options in front of them - project themselves as aggressive venture capitalists or enjoy the fruits of investments as passive portfolio investors. |
