GenNow is more professional, say consultants

Business families are coming back to power wresting control from executives, but there is a crucial difference now. The current generation is as good as any professional, say management consultants.

"Families are educating their children better, giving them good exposure. The brash ways of thrusting children on companies are over. Earlier, children joined the board in their 20s, but now they wait till they are in their 30s," said Anil Sachdev, CEO of Growtalent Company Ltd.

"They have the biggest stake in the success of the company. Several of these promoters are adequately qualified. I do not see anything wrong in it. Corporate governance rules put enough checks and balances on the way they function," said R Sankar, head of Mercer India.

The debate has been spurred by Malvinder Singh's rise in Ranbaxy. Consultants who have worked with the company point at the good work done by him in the past few years: his handling of the situation in England after financial irregularities came to light a few years ago and the deal he cut for Ranbaxy with Schwarz Pharma of Germany to outlicense its BPH molecule.

In the past year, as regional director for India, Malvinder was not only able to arrest Ranbaxy's sagging market share but also improve it in a fiercely competitive market. Dr Reddy's Laboratories, which has a global business model similar to Ranbaxy's, too, has members from the promoter family in key posts. Apart from Anji Reddy, who is the chairman of the company, CEO G V Prasad is Reddy's son-in-law, while COO Satish Reddy is his son.

"Both of them have strongly invested in their education and have earned the confidence of their people," said Sachdev, who has worked closely with the company. Consultants also point out the case of Sidharth Lal, son of Eicher promoter Vikram Lal. Though not on the board of the company, he has been running its motorcycle business.

 "He is the best business head at Eicher and is regarded highly by professionals working with him. When S Sandilya retires as Eicher chairman, many people expect Lal to step into his shoes," says a consultant who knows the group well.