The tale of two positive deviants

The unbelievable saga going on at the National Stock Exchange (NSE) has dominated the headlines for the past 10 days, with good reason. This is a new low for India Inc. An utter lack of governance, transparency and professionalism pervaded NSE’s leadership team, and sprang to the surface after its former managing director (MD) and chief executive officer Chitra Ramkrishna inducted a virtual nobody like Anand Subramaniam as chief operating officer in April 2013.

On the face of it, it may be hard to find even an iota of sanity in this long-drawn-out case. But amidst this hopeless collapse of governance and ethics, there are two individuals who chose to stand up, fought to uphold the truth and refused to be cowed down by the powerful cabal that ran the NSE. Both were outsiders in the NSE system. And played leadership roles in two critical domains currently in the eye of the storm: Technology and people. Their roles shouldn’t go unnoticed, especially when everyone else around them agreed to follow NSE’s consent plea strategy, without having to admit to the lapses, pay up and hush up the matter.

Umesh Jain joined the NSE in early 2012 as deputy chief technology officer (CTO) before shortly taking over as CTO. He quickly discovered that the maturity level of NSE’s tech systems resembled a “house of cards” and set about putting things in order, relying on multiple conversations with brokers at different locations around the country. He also documented all these new systemic changes in detail.

Soon Mr Jain began to run into a wall in his interactions with Ms Ramkrishna and Mr Subramaniam. Project approvals would get delayed. Emails would remain unanswered. Senior level hirings in his own department would be planned without his knowledge. His refusal to kowtow to an incompetent boss, even though he was to directly report to Ms Ramkrishna, eventually led to his resignation in April 2015.
 

In 2016, when the Securities and Exchange Board of India (Sebi) began its enquiry following the first whistleblower complaint about the co-location case, Mr Jain had already quit the organisation.

The NSE offered Mr Jain the services of its lawyers, but insisted that he accept the consent plea. The idea was to settle the case, so that NSE’s public-listing could proceed without a hitch. Mr Jain refused, insisting that he would fight his case with his own lawyer, but his legal expenses would have to be reimbursed by NSE. He also let Sebi know that he needed access to emails that could help throw light on his role in the clean-up since the time he took over.

Till then, Sebi did not know that Mr Jain had built an email “vault” where all mails were archived. If officials at the NSE knew of its existence, they did nothing to communicate that to the regulator. In fact, the NSE even made it difficult for Mr Jain by offering him a limited window of time to access the mails. Eventually, in August 2019, when Sebi put out its enquiry report, it completely cleared Mr Jain of any wrongdoing. 

Chandrashekhar Mukherjee joined NSE in 2010 as head of human resources (HR) and was later promoted to chief people officer. In 2013, when Ms Ramkrishna decided to bring in Mr Subramaniam as a consultant and continually gave him hikes, promotions and had his contractual obligations watered down, it was assumed that Mr Mukherjee would be in the know. Yet there were no records of Mr Subramaniam’s credentials, the post had not been advertised and there was no basis for the hefty hikes in compensation.

Naturally, in 2017, when Sebi initiated its enquiry into Mr Subramaniam’s appointment, it had Mr Mukherjee in its cross-hairs. By then, Ms Ramkrishna had tried to implicate the HR department in her responses to Sebi, stating that HR was always in the know. In his deposition, Mr Mukherjee argued that hiring a consultant was the prerogative of the business, not HR, and the expenses did not even feature in the salary budget at NSE. And he provided documentary proof of emails where the MD had vetted and authorised the appointment and compensation at every turn. At the deposition, Mr Mukherjee was grilled by his former MD’s lawyers. In its by now infamous February 2022 order, Sebi accepted his deposition in toto, even though it directly challenged every assertion made by Ms Ramkrishna.

Both Mr Jain and Mr Mukherjee are good examples of positive deviance, a concept which is based on the observation that there are certain individuals who follow uncommon behaviours and strategies leading to far better and effective outcomes for the organisation. When all the old-timers at NSE closed ranks to preserve the status quo, these two leaders stood up for what they believed was right, even at the risk of damage to their reputation. Mr Mukherjee was even denied a substantial amount as variable pay for refusing to toe the line. 

It is clear that the NSE management had lost its legitimacy and dangerously weakened the institution’s foundations. Even if one were to see the NSE saga as an exception, here’s the nub: How often do leaders consciously spot such positive deviants in organisations and give them the space to do the right thing? The world would be a better place if we did that more often.

The writer is co-founder at Founding Fuel