Successor to be from within family: GMR
In an exclusive interview with the Hindustan Times, Grandhi Mallikarjuna Rao, the 60-year-old chairman of the Bangalore-headquartered GMR, spelt out the group’s succession plan to Gaurav Choudhury & Tushar Srivastava. Company for GM Raobusiness Updated: Apr 04, 2011 21:43 IST
The next chairman of the GMR Group, which built and operates the Delhi and Hyderabad airports, would be from within the family there is no possibility of an outsider heading the business conglomerate.
In an exclusive interview with the Hindustan Times, Grandhi Mallikarjuna Rao, the 60-year-old chairman of the Bangalore-headquartered GMR, spelt out the group’s succession plan.
“After me, the next chairman would be decided by a three-member board consisting of my son-in-law and (two) sons,” he said. “As per the family constitution I am to retire at 70. However, I plan to retire by 65.”
The family constitution was drafted and signed by family members in 2007.
The billionaire, who also owns the Delhi Daredevils team in the Indian Premier League, said there is a “designated facilitator” and “a very clear process of what is to be done and within what time” in case a consensus eludes the family.
As per the family constitution, two options are available in a deadlock. The first option is a partnership model, where the group is run as a partnership by the three. The alternative is a rotating chairmanship among the three, every five years.Rao said he does not have a favourite and can’t say who is most likely to succeed him. However, he made it clear that "no outsider would head the GMR group" after him.
He said it was not a fear of a break-up that made him frame a family constitution. “This has to happen during the time of the founder-chairman. Had some Indian business families stayed together they would have been the number one in the world,” he said.
But what is the guarantee that his children or grandchildren would abide by the family constitution? “It talks very clearly of conflict resolution and a code of conduct. Every three months all family members meet to clean the pipelines, we discuss everything,” he said.
“This system has worked in Europe where families have stayed together for 300 years. There are 30 such families. When it can happen in Europe why not in India?” he asked.
The Raos meet one such European family every six months.