Thursday, April 23, 2009

Axis Bank theatrics

The curtain has finally been rung down on the succession issue at Axis Bank. P J Nayak staged an undignified walk-out after a stormy board meeting, paving the way for Shikha Sharma from the ICICI group to take over as CEO with board member Prithviraj taking over as interim chairman.

Nayak, going by reports, was completely isolated on the succession issue, with even those close to him for long deserting him in the final moments. Nayak wanted Kaul, an executive director, to succeed him. He has argued in an interview with BS that an organisation should bring in an outsider only if it is weak. Not true. It may need to bring in an outsider also if the insiders are weak (which can happen in an organisation that is strong but has been a one-man show).

Nayak had earlier successfully resisted the RBI's efforts to bifurcate the positions of chairman and MD, saying he needed time to groom a successor. It turns out that he failed to do so even when given adequate time. This is not uncommon- BS had an edit yesterday mentioning the cases of L&T and ITC where the present chairmen seem to think themselves immortal.

The right thing has happened at Axis Bank and this is, in large measure, due to the role played by the nominees of SUUTI who presented a united front on the issue and made the process of finding a successor rigorous. It appears that even in a private bank, it is the government that has to be around to ensure the right outcome. This will not come as a surprise in the present times where the same phenomenon is being seen on a bigger scale in the US banking system and elsewhere.

One last point. Nayak's quitting as chairman in a huff was inappropriate. One could have understood if some legal or ethical issue had been involved. There wasn't any. Nayak left in a fit of pique only because he couldn't have his way.

This isn't done. Banks run on confidence and for an executive chairman to walk away without ensuring a smooth hand over can be potentially harmful. It's a different matter that the Indian banking system is in good shape and that we need not fear such an outcome in the present instance.

Incidentally, I was told that AT Paneerselvam, board member at Axis and former chairman of IBA, collapsed in his car and passed away while on his way to the airport from the seven hour board meeting. Strange that no paper has reported this.

84 comments:

K.R.Srivarahan said...

Well said.A clarification may be in order.It appears that Mr.Nayak wanted Mr.M.M.Agarwal and not Mr.Hemant Kaul to become CEO. Mr.Nayak's histrionics has destroyed the credibility he had built up over time.Not everyone can deal with loss of corporate power with equanimity.Incidentally, do you think that Mr.Pannir Selvam might have succumbed to unfortunate tension created by the marathon meeting?

T T Ram Mohan said...

I understand that Nayak backed Agarwal initially and later switched to Kaul.As to the connection between the meeting and Mr Selvam's passing, one can only speculate but we do know it was a stormy event.

-TTR

Charlie said...

Mr. Nayak has been an excellent manager but he certainly lacked in leadership qualities as demonstrated by his behaviour. The unfortunate part is that this sort of behaviour is common in most organisations or institutions. Seniors are unwillingly to train and groom their juniors for higher responsibility and like to show that they are running a one man show. In most of the cases even after the person moves up the ladder he does not let go his control over the old department. It just shows that such a person is immature and lacks foresight. He has obviously not trained his juniors well or suffers from some emotional handicap. It is suprising that such people make it to the top, however it keeps happening all the time and that is the reason we see a huge amount of attrition of quality talent in organisations.

arun said...

Nice that you highlighted this. Probably Mr Nayak, a former bureacrat still thought that he was a holy cow functioning in a government department. Old habits die hard.This is a strucutural issue and regulatory and bodies protecting shareholder interest have a task at their hand.
What of the financial journalists. It is sad that death of the board member was not reported when it might be related to the work pressure of one of biggest private Indian Bank. More so if the person happens to be a former IBA chairman.

vk said...

The inside story no one knows is that Mr Nayak deliberately ignored succession issue despite the Board's repeated advice.He had only one agenda - to promote Kaul as successor by nomination than by selection. The Board wanted to consider other senior executives, but Mr Nayak passed such negative opinions about them , the Board did not have any option , but to consider an outsider.By his obstinate resistance to other candidates from inside, he lost his eseteem within the Bnak aand also outside by his churlish behaviour with the Board.

Shailendra Kaul said...

This case again shows how rare the the quality of leadership is as was explained in the blog 'Lincoln and Leadership'.

Sankt Ingen said...

Mr. Nayak was entitled to his share of adamancy.There may be another unexplored angle of clash of titans - the name of the other compatriot most people in the know do not wish to discuss as he is still a holy cow in the finance industry.

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If you have a good look around, you may discover quite a bit published on [url=http://muahotdeal.com/thoi-trang.html]Thoi trang nam[/url]. But we have noticed that not all of it can be useful, it just depends on your specific needs. Your specific situation will influence what additional areas of study you have to consider. Yes, it can be frustrating when you think you have all you need, but you really do not. Assembling the big picture for any subject is often not simple or fast with online research. Here are a few things we have discovered about this topic, and hopefully it will be a few more pieces of the puzzle for you.

The relative complexities of women's and men's fashion

Both men and women may feel the demands of keeping their wardrobe up-to-date and in time, yet men's style usually feels a lot less complicated. Of program, for both sexes, outfits and style choices can be equally as delicate, and there are many'modern'items that can quickly become fashion faux pas - who can say they often see people travelling in 70s flares? On the other side, men's style features a few choice items which can exist forever - which man is going to watch out of place with a good-quality, tailored suit, for example? Pick classic pieces, colors and materials and you'll never look out-of-place.

Why basic men's fashion is eternal

The basic man's suit has scarcely changed for over a hundred years. True, there are numerous types for various occasions, nevertheless they are all popular in their pursuit of a wise, sharp search for the wearer. The great thing about traditional style for men is that it's simply elegant simply cool. A well-groomed lady will almost always look his sharpest in a well-tailored suit, and this is a testament to the design of such clothing. A suit will undoubtedly be used to work in many jobs because of the professional look it affords to the individual, instilling a sense of respect and confidence. Similarly a suit will be utilized to several social events, such as a tuxedo to a black-tie event. This extraordinary flexibility that enables matches to be utilized in almost all situations is what gives it its eternal border and a lasting place in men's fashion.

Modern trends in traditional men's style

Though classic men's designs will never be replaced, it is interesting to remember that changes in men's fashion trends have brought particular traditional clothes back to fashion. The acceptance of vintage clothing, specifically, has taken back a wide-variety of classic types into men's wardrobes, such as that of the dandy guy. 'Dandy'is a term used to refer to men who dress yourself in a classic yet lavish way, placing value on appearance and acting in a polished manner. This development for nearly'over-the-top'traditional style for men is evident from events like the'Tweed Run', wherever men and women of all ages dress yourself in obviously Victorian-style attire and decide to try the streets on vintage cycles - with many of the men sporting flawless mustaches! That is just one of several examples of proof exhibiting the resurgence of such variations. There are also numerous blogs on the web which focus on gentlemanly style - such as'The Dandy Project'and'Dandyism'- as well as complete web sites such as'The Art of Manliness'specialized in giving articles on basic men's fashion and grooming.

In conclusion, though certain facets of common men's fashion could be brought back as new styles, the basic garments that they derive from will never slip out of fashion.

"All it will take certainly are a few simple costumes. And there is one key - the easier the better." - Cary Grant

StyleGun is an online men's fashion store with a technical perspective.
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