Five of seven members of apex body to get different operational charges; plan aimed at broadbasing outlook, skills.
In a move aimed to allow its future leaders to have working knowledge of all its businesses, the GMR Group has decided to shuffle its brass.
Come October, five of the seven members of the GMR Holding Board, the apex decision making body, will get new operational responsibilities, said company officials involved in the process. The only two members to continue in the same role will be G M Rao, 62, the corporate chairman, and K Balasubramanian, who will continue to oversee GMR Foundation. But GM Rao’s sons, son-in-law and other close aides will get new assignments.
Rao’s elder son, G B S Raju, now the chairman, corporate functions and international business, will head the energy division. His younger brother, Kiran K Grandhi, now in charge of the Delhi, Hyderabad, Istanbul and Male airports, will cease to be the chairman, airports. Instead, he will focus on urban infrastructure.
Grandhi will hand over his charge to Rao’s son-in-law, Srinivas Bommidala, currently in charge of urban infrastructure and highways. A GMR spokesperson did not want to comment.
Explaining the rationale, a senior group executive said this rotation was being done because the future leader would be selected from among these members of the board. Therefore, it is very important that every board member gets exposure and broadbase his skills.
Succession planning however is not on the immediate agenda. GM Rao had stated he’d like to retire at 70 and still has eight or nine years to go.
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“Each of our businesses contributes to the overall growth. So, our chairman emphasises on holistic training. It also helps the senior leadership to grasp how to leverage the group strengths better,” added another senior executive on condition of anonymity.
RATIONALE
Bangalore-headquartered GMR is a diversified company that straddles the entire infra value chain. It manages four airports, 13 power projects under various stages of implementation, nine highway projects, a Special Economic Zone and other urban infrastructure projects. It also wants to expand into related areas like property development and transportation. With such a canvas, it becomes important for each of the key leaders to have first-hand knowledge of the different business verticals.
| THE NEW MANDATE | ||
| Name | Earlier responsibility | New responsibility (effective from Oct 2011) |
| B V N Rao | Chairman - Energy | Chairman - Corporate functions |
| G B S Raju | Chairman - Corporate functions and international business | Chairman - Energy |
| Kiran K Grandhi | Chairman - Airports | Chairman - Urban infrastructure |
| Srinivas Bommidala | Chairman - Urban infrastructure and highways | Chairman - Airports |
| Prasad M Kumar | Business chairman - Group corporate development member group holding board | Chairman - Emerging business and governance |
In the past, they have also managed responsibilities outside their mandated verticals. Kiran Grandhi was behind GMR’s life insurance joint venture with ING and Vysya Bank, from which they later exited. GBS Raju, over the past 15 years, has held key portfolios in various GMR Group companies. He was instrumental in installing India’s first and the world’s largest floating barge-mounted power plant — GMR Energy Ltd, Mangalore. He also steered the group’s foray into the roads business. As the former Group CFO, he led GMR Infrastructure’s maiden Initial Public Offering in 2006.
This will be the third time such an exercise will be undertaken at GMR. The group has been following this manpower rotation trend since 2004. The previous such rejig took place in 2007. “Shuffling the line men across jobs before they take over the top job is a classical practice to groom people. Wholesale shuffling of portfolios is a rare case. But rotating responsibilities creates value, as it builds relationships,” said K Pandia Rajan, managing director of Ma Foi, group which specialises in personnel consulting.
The Group Holding Board, fully owned by G M Rao himself, is responsible for strategising key initiatives, approving business and annual operating plans, nurturing future leaders. GMR Holdings Pvt Ltd acts as the holding company. It owns 71.17 per cent of the listed flagship, GMR Infra. The different businesses come under GMR Infra as SPVs or drop-down subsidiaries. Each of the verticals like energy and airports are to also, in time, have a holding company and get listed.