The succession question

Management trusts have their drawbacks

Reports that some corporate groups are attempting succession planning by setting up management trusts have turned the spotlight on this novel mode of corporate governance in the family-owned enterprises that dominate Indian business. At least two groups are said to be considering this structure— the Ambanis, which run India’s largest listed conglomerate Reliance Industries Ltd (RIL), and Chennai-based Shriram group, which runs several large finance companies. Their motives for doing so are principally driven by the need to ensure smooth succession and avoid the family feuds and splits that accompany the passing of the founder-promoter — a fate that befell