Life after being a CEO: What Chanda Kochhar, Mistry and Sikka are doing

Consulting, board memberships, new gigs keep former corporate bosses busy, but they are often under greater scrutiny

How a CEO leaves a company is more important than how he or she joins it. But in today’s business environment, the adage could see its resilience being tested. A growing number of leaders have left corporations before their terms ended, for factors ranging from ideological disagreements with their board and predecessors to doubts on their credibility to non-performance. In some cases, there was no apparent reason.  

Does that signal a shift in culture? R Gopalakrishnan, a Tata Sons veteran, says, “In the future, more and more executives will leave companies ahead of time with little or no clarity in the public domain on why.” 

One recent example that had many guessing is Aditya Ghosh, who built IndiGo into an efficiently managed airline when others, including Kingfisher Airlines and Jet Airways, struggled. Ghosh, who took the no-frills carrier public, abruptly resigned as CEO in April. The company said he was going to start his own venture, amid speculation on why he would leave just when the best airline in the country was about to venture into international skies. Ghosh later joined Tata Trusts as a senior adviser for cancer-related social ventures. 

More recently, high-profile banker Chanda Kochhar left ICICI Bank under a cloud of controversy over allegations of wrongdoing in giving loans to the Videocon group, which in turn had allegedly invested in Kochhar’s husband’s company. 

While the matter is pending investigations, she stepped down voluntarily. This begs the question as to how likely her successful return to banking might be? 

According to Akshay Chudasama, managing partner at law firm Shardul Amarchand Mangaldas, there are no comebacks if a CEO is deemed guilty of fraud. “Otherwise there is no issue,” he adds, citing Ghosh’s example. Ghosh was actually a lawyer at law firm J Sagar Associates before joining InterGlobe Aviation, the company that runs IndiGo.

“Strained corporate exits are of two kinds — when you’re fired or squeezed out, and when exiting voluntarily to pursue other avenues,” Chudasama says. Then there are aberrations such as in the case of former Tata Sons chairman Cyrus Mistry, who is also part of a promoter family with its own cluster of businesses and for whom a job is not paramount. Mistry recently announced the launch of Mistry Ventures, a venture funding concern for start-up companies. 

When Varun Berry left PepsiCo India Foods as CEO, it created ripples as his exit seemed unplanned and left the firm headless. But it didn't stop him from joining Britannia Industries as managing director where he was recently reappointed for five more years.

Equally, Nikesh Arora, one of the highest paid executives at Google, expected to eventually take over as head of SoftBank when he joined, took everyone by surprise with his abrupt exit in 2016, just two years after his appointment. Speculation on his exit aside, Arora recently joined as CEO of cyber-security firm Palo Alto Networks. Sonny Iqbal, partner with executive search firm Egon Zehnder, says if a leader has domain expertise and knowledge in a hard-to-find area, then finding new pastures is less of a challenge, as long as an outgoing CEO is honest and straight up with both his outgoing and new boards. “Eventually, the truth always gets out,” Iqbal adds. He’s not alone to think that way. 

Unmesh Pawar, partner and head of people performance and culture at KPMG in India, says, “While it is really about how the CEO explains the situation to the world at large, when it comes to matters of financial impropriety or POSH (prevention of sexual harassment), tolerance levels are much lower.”

Gopalakrishnan says that across the ocean, international CEOs have almost always bounced back. Apple’s Steve Jobs, Ford's Lee Iacocca, Citibank CEO Vikram Pandit (who resigned and then started investment company Orogen Group), and Deutsche Bank boss Anshu Jain (who also resigned and then joined Cantor Fitzgerald as president) are some examples. 

Management consultants indicate there is a renewed focus on HR policies across large corporations. Pawar says that includes organisational conversations around trust and appropriate behaviour in light of it, talks on ethics, anti-corruption, insider trading, cross-border transactions, and sexual harassment. There’s also leadership briefings on behavioural impact of inappropriate behaviour for the organisation and its reputation. “Risk as a function is becoming more important and active in some or most of these situations,” he adds.

Gopalakrishnan says, “While exits under a cloud of controversy will not be unusual anymore, the most important thing that most CEOs and boards fail to realise is that a battle of reputation is almost always fought not in legal circles but in the court of public opinion.” That, at least for now, won’t change.