M.V. Subbiah, the head honcho of the Rs 5,000 crore Murugappa Group, self-admittedly had had an eventful innings at the top. Subbiah, who retired this week at the age of 65 years, is credited with setting the corporate governance ball rolling in the group and also having the moral courage to set an example. |
In a career that spanned 43 years since 1961, he looks back with satisfaction and gratitude. "Having not graduated in anything, if my family was not there I would not have got a break. Looking back I am one of the most satisfied guys and it is all thanks to the family. Everything that I have been able to do is because of the support of all the family members in the business," he says. |
Subbiah broke with tradition in April 2001 when he announced his decision to step down from the chairmanship of the Murugappa Group when he had a good three years more to continue. |
Subbiah actually initiated the transformation at Murugappa in November 1999 when the Murugappa Corporate Board (MCB) was formed with family members and three independent directors. The independent directors included professor Marti G Subrahmanyam and Natalino Duo and Infosys co-founder N S Raghavan, who later became non-executive chairman of the MCB in April 2001. |
Since then, the Murugappa Group has seen many more changes. In October 2002, P S Pai, former vice chairman of Wipro, yet another non-family professional, took over as executive chairman of MCB from Raghavan. |
By corporatising its board, bringing in professional directors from outside and also setting in place a committee that will decide on who will head the group, either from within the family or from outside, the Murugappa Group under Subbiah has managed to set notable precedents in governance among family owned businesses in India. |
In the history of family controlled businesses worldwide only 3 per cent survive without splits when the third generation takes over, he points out. In the case of the Murugappa Group, the fourth generation is taking over the reins and thankfully, there is no trouble or talk about a split. |
Subbiah lets out the secret. "When I joined the group, I was given to understand that I was a trustee and not an owner. I only hope I have lived up to my trusteeship. Our biggest strength as a family group is that none of us think we are owners, but instead consider the business we inherited as a trust we have to manage." |
And Subbiah and his ilk have managed the 'trust' well. What started 100 years ago as a small family run business in indigenous financing is today a Rs 5000 crore group with diversified interests in abrasives, engineering, farm inputs, plantations, sugar, bio-products, chemicals, nutraceuticals, insurance and financial services. |
"I only continued with the tradition and the values that we inherited from our family and yes we have been unusual in the Indian scene in the way we have looked at our business interests. We have never seen ourselves as owners but as trustees who have kept it, nurtured it and bettered what we inherited." |
Looking ahead, Subbiah is definite about his retirement plans. "I hope to take a sabbatical and go to Kelloggs and study family businesses and their history for a year. I hope my application is accepted," he says. |
Additionally, some family controlled business houses in India have also evinced interest in bringing him on board as an advisor on how to manage a family business without the ugly spectre of a split surfacing. |