That India's central bank, the Reserve Bank of India (RBI), has become a household name under its easy-going, yet tough-as-nails 23rd governor, Raghuram Rajan, is a foregone conclusion. Rajan brought a kind of approachability and immediacy to the governor's job, perhaps missing with any of his predecessors, one of whom went on to lead the country, first as finance minister and then as prime minister.
In the three years he has been at the helm at Mint Road, Rajan proved his mettle and had everything going for him - lower current account deficit, a huge initiative to clean up bank books, even lower interest rate than what he inherited in 2013 - not counting his age, just 53 years!
The lament by the media and market analysts of every hue and nationality was thus understandable when Rajan announced that he would step down in September, not seeking an extension, and instead move back to academia. The background being an unfortunate personal attack on his credentials by Bharatiya Janata Party member of Parliament Subramanian Swamy, with the government sadly remaining a mute spectator and the prime minister's defence of Rajan coming a bit late in the day. But terming Rajan's exit from the RBI - as many market observers have done - the beginning of the end of the "India story" is not just an exaggeration, but also a disservice to the 81-year-old institution that has weathered the ups and downs of history.
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After years of will-he-go, will-he-not speculation, ITC's Yogesh Chander Deveshwar finally announced that he would move into a non-executive chairman role from February 2017 for three years. Deveshwar took charge of the firm at a far from favourable time - recollect the 1995-96 messy shareholders' fight and ignominious departure of the then chairman Kishan Lal Chugh - and turned the cigarette major into one of the country's biggest and most respected consumer goods companies.
And then there is L&T's indomitable Chairman A M Naik, who has led the construction-to-rigs conglomerate from the front for the last two decades, and guided it to victory in many a bruising business and takeover battle. Naik recently hinted that current Deputy Managing Director S N Subrahmanyan "… is the number two person in the company and has a very good chance of taking over" from him, while not ruling out the possibility of him taking on a non-executive role after September 2017. "There will definitely be a chairman. Whether it is an executive chairman or a non-executive chairman is yet to be decided," Naik is reported to have said.
Why does the market and the boarder business milieu have this tendency to create an aura of indispensability around leaders of some of the finest institutions of the country? And pre-judge the successor not so charitably? Maybe it has got something to do with our proclivity for favouring personalities over the institution. It was the same when Ratan Tata took over the reins of the Tata Group from the legendary J R D Tata in 1991, with very few giving him any chance of success. Starting from a handicap of entrenched prima donnas, Ratan Tata not just cleaned the Tatas' "Augean stables", but changed the contours of the group to reflect the new market realities and opportunities. Ditto with Cyrus Mistry, who took on the mantle from Ratan Tata in 2012, and is busy reworking many of Ratan Tata's "successes", much like Ratan Tata did JRD's!
Why is it that if multinationals such as Unilever and Nestle can be led by outsiders just as well, some of India's finest firms foreclose that option? Has that got something to do with the incumbent leader's tendency to build an aura of indispensability around himself or herself? There is also this tendency to hang on to some role or another, an unwillingness to cut the umbilical cord, so to speak. A happy example is Infosys, where the promoters have made it a truly professional firm by delinking themselves completely, with the principal founder, N Narayana Murthy, refusing even the ceremonial chairman emeritus' post.
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
