The handover from father Shiv Nadar, 75, who co-founded the IT company back in 1976, will not really lead to a shakeup or change in strategy.
Roshni Nadar Malhotra became the first woman chairperson heading a top Indian IT company when she took charge on July 17, 2020. She takes over the role from her father Shiv Nadar, 75, who co-founded the parent company, HCL, back in 1976.
Roshni is obviously not new to the company. But she is yet to play an active role in the management of the firm, say industry watchers. Until recently she was the CEO and executive director of HCL Corporation and also vice-chairperson on the Board since 2018.
Now, what will change with her becoming the chairperson? Probably nothing, said multiple analysts and industry people Moneycontrol spoke to. At least, not right away.
“Nothing will change,” said V Balakrishnan, former CFO, Infosys. Shiv Nadar still has full control as the managing director (MD) and chief strategy officer (CSO) in making key decisions, as is the case with most promoter-driven organisations including Wipro, he added.
In a statement on July 17, the company said that while Shiv Nadar will step down as the chairman of the Board, he will continue to be MD and CSO.
Nadar, clearly, continues to hold the decision-making power in the company and that translates to status quo in the current business strategy as well.
C Vijayakumar, CEO, HCL Tech, expressed the same during the recent press briefing announcing Q1 results. “Strategy business has been very well thought through. It has been executed very well. I do not see any change in strategy. Shiv continues to play the role,” he said.
“All of us contribute to the overall strategy and momentum. Last four years we have delivered an exceptional growth and optimistic even in this environment,” he added.
Nadar holds close to 60 percent share in the company. The arrangement is similiar in another promoter driven IT major - Wipro. Azim Premji, Wipro's promoter, and his family hold over 67 percent in Wipro. His son Rishad is the current chairman of Wipro.
Both in Wipro and HCL Tech, chairperson continue to make key decisions.
“In promoter-driven firms, they will keep a tab on who is leading the operations side since they have a larger interest in the company. So the relationship between the chairperson and CEO is important,” added a former industry executive.
CVK, as Vijayakumar is fondly called, and Nadar are on the same page. For, unlike Wipro or Infosys, HCL Technologies grooms internal talent to take the leadership roles. CVK has been a part of the HCL Tech for more than two decades and was groomed to take on the role of the CEO.
In addition, HCL Tech has been delivering double-digit growth in the last three years. For the year ended March 2020, the company’s revenue stood at $9.936 billion, a growth of 15 percent over the previous year. Its peers TCS, Infosys and Wipro grew 4.7 percent, 8.3 percent and 1.6 percent year-on-year respectively for FY20.
Even during COVID-19, the company’s revenue was $2,356 million, 0.3 percent decline year-on-year. TCS and Wipro’s revenue declined 5 percent and 7.7 percent respectively during the same period.
“Given the company’s strong performance, changing the leadership will be a huge mistake and they know that,” added the executive.
“But as Nadar continues to play a key role in implementation of strategies, he could help Roshni ease into the role of chairperson,” pointed out Pareekh Jain, founder, Pareekh consulting, a tech consultancy firm. “It could also be a part of succession planning before Nadar retires,” he added.
Vijayakumar pointed out, “If you see HCL as a company, it prides itself in a very strong succession planning, be it CEO or other leadership transition. I am sure this is also part of succession planning. We are very happy about this.”
So far Roshni, Nadar’s only child, has taken an active role in education as the chairperson of the company’s CSR committee. A communication major, she also has a business administration degree in social enterprise management and strategy from the Kellogg School of Management. She is now the trustee of Shiv Nadar Foundation and the chairperson for the leadership academy for the underprivileged, VidyaGyan.Her background in education could come in handy as well. Jain pointed out that given Roshni’s background in education, there could be more focus on talent and skill development. “We could also see her being more active when it comes to interaction with industry bodies and the government,” he added.