After quitting Infosys as its HR Director – his last day is on June 11 – Mr Mohandas Pai plans to play a larger role in the area of higher education, boards of some corporates, spend more time with his family, and “enjoy the freedom to do what I want.”

While declining to say anything on succession issues at Infosys, where he worked for 17 years, Mr Pai discussed with Business Line his thoughts on succession planning in corporate India.

Excerpts:

What are your views on succession planning; you say your comments on Infosys have been misquoted, misrepresented… but what about corporate India in general? How is this being done or how should it be done?

In public listed companies, the nomination committee of the Board should play a very important role in succession planning. They have to bring in more transparency in the entire process. Even if you are a family-owned company, there is need for independent directors to bring in transparency, because you've taken people's money, be it only five per cent.

Even if the family member is the best person for the job, which is okay, it should be a transparent process and there should be accountability. The compensation should be linked to performance and regularly evaluated.

But is this happening?

It's beginning to happen more and more in the last ten years; I'm a big optimist. It will increase if there is competition in the economy and survival is at stake.

Can you give examples of corporates that have got this right?

Mahindras are doing it very well; they are bringing in young leader and elsewhere, too, it is beginning to happen such as in L&T.

Is it a good idea to create different verticals and put leaders at the helm of each?

I've not studied the strategy…

But do you agree with the principle that if a company gets too big, divisions should be created?

When a company gets very big it is better to have greater autonomy for operating units. Each unit should have a person to run it, call it a CEO or whatever. ICICI Bank has gone through succession and done it very well. So we do have outstanding example of companies. It happens much more than we believe because people are not talking about it, but it is happening quietly.

Because at the end of the day think of it economically. If I own a company and have a large stake, my interest should be the economic wealth it creates. If I put myself in the chair and I happen to be incompetent I am the biggest loser. So, it's much better for anybody who has a large stake to get the best possible person and increase wealth.

But, then, what do the owners do with their time?

Find out the best use for it; maybe you can set up a museum or invest time in social welfare. But most people, I find from my limited experience, are not willing to let go because they don't know what to do with themselves. It's insecurity.

You can stay on the board and have a review once a month like (Azim) Premji does. But the more important issue is lack of competition. Once the economy becomes much more competitive things will change. Corporate governance norms in India are pretty good and succession planning has improved too. Indian companies are run very efficiently, the return on equity is very good. But we as a people never celebrate our success. We never say good things about ourselves and are overcritical.

But why?

Because we love misery, whereas we should be optimistic. We have a fantastic corporate sector; yes, we had challenges like Satyam, but every economy has got its share of challenges.

What do you feel about the involvement of the corporate sector in the 2G scam?

The 2G scam was waiting to happen because of bad policy and bad politics. You are putting a pot of gold and asking everybody to take a shot at it and they will. It's a natural human instinct. Now look at the policy of 3G auction; it was fantastic, transparent and worked beautifully.

There is also corruption when it comes to our natural resources.

Take mining; why can't you auction it to the highest bidder? The airports were auctioned to those who gave the largest share of revenues. It worked very well. Why can't we do it for mines, oil and other natural resources, which are the people's property? And when you exploit these, invest the revenues in the education and skill upgradation of the people of that region.

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