Moneycontrol Pro Panorama | CEO changes are driving investor expectations

High investor expectations and focus on quick results give limited runway for new CEOs to implement changes.

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CEO and top management changes are important events in a company’s history. A successful chief executive officer (CEO) and team can take the company to new heights, prepare it better for the future and reward stakeholders in the process. So, it is no surprising that investors of IndusInd Bank reacted positively to the appointment of Rajiv Anand as new managing director and CEO of the company.

Anand has deep industry experience and is expected to help IndusInd Bank move past the recent controversies and help the company regain business momentum. “This is a welcome move and should help rebuild the leadership team at IndusInd. The bank has started walking the right path in terms of its key initiatives,” writes Madhuchanda Dey from our research team.

Elsewhere, Tata Motors announced the appointment of a new CEO at its subsidiary Jaguar Land Rover (JLR). P B Balaji, currently the chief financial officer of Tata Motors, will take charge as CEO of JLR from November. Balaji has played a key role in improving the financial performance of Tata Motors in recent years and had a successful corporate career before joining the Tata group.

The management changes at IndusInd Bank and JLR come shortly after a CEO change took place at Hindustan Unilever. In June, Sun Pharma said Kirti Ganorkar will succeed its founder Dilip Shanghvi as managing director of the company. Outside India, Indian-born Shailesh Jejurikar has been appointed as president and CEO of P&G from January 2026.

Management changes generally infuse new energy and fresh thinking into the company. Infosys regained its growth mojo under its current CEO Salil Parekh. Yet, one can gauge a CEO’s success only over a long period of time.

HDFC Bank is yet to replicate the success it has seen under its earlier CEO. Shares of its private peer ICICI Bank have done relatively better over the last five years. Wipro has tried multiple CEOs over the last decade to lift growth rates but saw fleeting success. Investors in Tech Mahindra and LTIMindtree are awaiting the full results of management changes at their respective companies.

Sometimes, it can be difficult to fill the shoes of a charismatic predecessor. High investor expectations and focus on quick results give limited runway for new CEOs to implement changes. This can lead to unpleasant outcomes. The abrupt CEO exits at Starbucks and Disney in recent years holds a cautionary message for investors.

To sum up, a smooth transition, right business decisions, good execution and favourable market conditions do play an important role in shaping success of the incoming leader. A new CEO who is successful can benefit from the company’s better performance and so can shareholders.

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R Sree Ram
Moneycontrol Pro