Experts say transition must be handled professionally.
Mumbai: The concept of outside managers in promoter-driven companies in India is still in its nascent stage with experts saying that the transition if not handled in a professional manner could trigger similar issues going forward.
As more companies transition themselves to being driven by professionals, the way forward according to industry experts is to have a supervisory guidance board above the board of directors that will help in addressing any potential conflict of interest at an early stage.
According to them, industrialisation has picked up momentum in India only in the last thirty years because of which we will now see number of first generation promoters retiring and handing over the reins to professional mangers.
While there are several MNCs and home grown companies operating smoothly in India with clear demarcation between shareowners and professional boards, Deven Choksey, MD of K.R Choksey Securities said the ideal way is to create a supervisory board that can settle similar kind of issues facing the company.
“This is a common practice in most developed markets in Europe and US where family offices operate through a supervisory guidance board with clear-cut guidelines on value systems and policies. We can see this system in many MNC’s. Infosys failed to do that and the promoters straight away handed over the reins to complete outside professionals leading to the current crisis,” he added.
