Not many Indian CEOs are likely to forget the year 2018 anytime soon. It’s a year that was marked by several big-bang exits from among their own ilk. While ICICI Bank Managing Director (MD) and Chief Executive Officer (CEO) Chanda Kochhar had to quit over allegations of quid pro quo, Infrastructure Leasing & Financial Services Vice-Chairman Hari Sankaran and the entire board were sacked by the government as the infrastructure financier failed to pay interest and principal on its debt of Rs 910 billion.
A surprise corner-room exit was that of Aditya Ghosh, who left IndiGo, while the Reserve Bank of India did not give an extension to Rana Kapoor as MD and CEO of YES Bank, allowing him to stay in office till January 31, 2019.
Fortis Healthcare Chairman Malvinder Mohan Singh and Non-Executive Chairman Shivinder Mohan Singh resigned from their positions after the Delhi High Court upheld an international arbitral award of Rs 35 billion passed in favour of Japanese pharmaceutical major Daiichi Sankyo, which had alleged that the former Ranbaxy promoters had concealed information about the proceedings against them by the US Food and Drug Administration. The Singh brothers said they wanted to free Fortis from any encumbrances that might be linked to them. But it was the departure of online retailer Flipkart’s co-founder and Group CEO Binny Bansal over charges of “personal misconduct” which made the entire industry sit up and take notice.
Within months of acquiring Flipkart, American retail giant Walmart said Binny had not disclosed certain serious allegations made by a former colleague. Though Binny strongly denied the allegations, he had to step down in November. In May, co-founder and former CEO Sachin Bansal had quit after Walmart bought a 77 per cent stake in Flipkart for $16 billion.
ICICI Bank appointed former Supreme Court judge Justice B N Srikrishna to probe allegations of conflict of interest and quid pro quo against Kochhar in the Videocon loan case, while investigative agencies are probing Hari Sankaran and other IL&FS officials.
Head hunters and human resources (HR) managers say 2018 was particularly challenging as #MeToo cases too came out, which impacted a few CEOs of relatively smaller companies. “The CEO’s conduct must be above suspicion like Caesar’s wife. With social media pressure, the CEO’s role will become more important in setting the rules for all employees, both in terms of probity and accountability,” said the HR head of a top conglomerate who did not wish to be named.
An interesting sideshow of the exits of CEOs at private banks is that of succession. While Kochhar was replaced by Sandeep Bakhshi, who was heading ICICI Prudential Life Insurance, Axis Bank brought in Amitabh Chaudhry from HDFC Standard Life Insurance to replace Shikha Sharma as MD and CEO. The RBI has asked YES Bank to appoint Kapoor’s successor by February 1, 2019.
Finding a successor is not an easy task for India Inc. Priya Chetty-Rajagopal, founder and managing partner at C-suite head-hunting firm Multiversal, said: “It has something to do with the fact that as a people, we like to have someone to look up to. The distance between the number one and two is huge. We also don’t take kindly if someone states their ambitions to move into the top job. It’s just not part of the culture here.”