Split Down the Middle

The Kotak Committee’s recommendation to segregate the roles of chairman and managing director hasn’t gone down too well with dual title holders, who fear it may lead to both company control and perks slipping away

Are designations important?

Ask Indian promoters who are staring at a potential di lution of their calling cards if capital markets regula tor Sebi decides to accept the `role segregation’ recommendation of the Kotak Committee report on corporate governance.

Business promoters may have to give up the dual-faced title of chairman & managing director (CMD) and take up onlyone, if authorities make it a prerequisite for listing on Indian exchanges or through an amendment of the Companies Act. With considerable certainty, if the recommendation is accepted, the first level of change would be in Sebi’s Listing Obligations & Disclosure Requirement Regulations.

 

That’s not all. The Kotak Committee has also recommended that all promoters (or professional managers) holding the titlechairman’ or `chairperson’ should move into a non-executive role by 2022.

 

These bits of regulations, among a whole lot of other proposals, are giving promotors heartburn, as they stand to lose a “great deal“ if these become the norm.

 

“We’ll lose control over our business where we are majority shareholders…And once the promoter-chairman slips into a non-executive role, he’ll not get salary or perks,“ laments the CMD of a listed financial services firm.

 

The proposal to segregate the roles of managing director (MD) and chairman, if it becomes a law, could become an eyesore for promoters with larger stakes (promoter shareholding). Over 91% of companies in India have founding family members as controlling shareholders, either directly or indirectly through a holding company (See table on closely-held companies).

 

“A promoter with a higher shareholding wonders why somebody else should be on top of him… That could be one reason why they hold both roles,“ says Kishore Biyani, CMD, Future Retail.

 

THE TITLE DEBATE

 

The gist of this proposal is that if the roles are split -instead of one person holding both titles -it will embolden the board to effectively intercede in matters pertaining to running of the company and for the benefit of general shareholders.

 

“The roles of chairperson and managing director should be split. If the positions are held by the same person, it could be the biggest negation of corporate governance,“ says M Damodaran, former chairman, Sebi. “The board, which is headed by the chairperson, is tasked with holding the management, led by the managing director, accountable.“

 

If you go by the book, the chairman heads the company board and the MD helms the management. The MD takes care of day-to-day operations. The chairman is more concerned with `vision’ and long-term growth. The chairman heads board meetings -board members, whom the chairman leads, quiz the management (led by MD) about the working of the company. They support, object or reject proposals put forth by the management.

 

The Kotak Committee feels that if both MD and chairman roles are held by the same person, it limits independence of the board to question the management.

 

The separation of powers of the chairperson and chief executiveMD is seen to provide a better and more balanced governance structure by enabling better and more effective supervision of the management, the Kotak Committee report states. Splitting of roles would provide a structural advantage for the board to act independently, reduce concentration of power with one person and ensure that board tasks are not neglected by the allpowerful individual holding the CMD’s title, the report explains.

 

“Currently, 640 NSE-listed companies have one person holding chairman and managing director roles. If this recommendation is implemented, these companies will have to split roles,“ says Pranav Haldea, MD, Prime Database.

 

Roughly 141 BSE-500 companies have CMDs at the helm while 186 have standalone MDs. Over 60 companies have `executive chairmen’ as the top functionary while in 220 companies, there are nonexecutive chairmen.

 

Indian businessmen fear that if they give up either of the roles, they will lose control over the business. If a current CMD decides to give up his chairmanship and just be the MD, he may not be able to influence the board effectively. Alternatively, if he becomes the chairman and give up his role as MD, he may not be able to direct routine company operations.

 

“Between chairman and managing director, I would think the MD is more powerful because he actually runs the company,“ says Samir Paranjpe, partner at Grant Thornton. “Thisrelationship could be likened to our democracy, where the President is the supreme head of the country, while the Prime Minister has all the powers,“ he explains.

 

LOOPHOLES GALORE

 

Unscrupulous promoters may find ways to veer around the rule, should it become one. For instance, they could appoint puppet chairmen, who would do as promoters dictate. They could also assume titles such as vice-chairman and MD and run their mandate. “If that happens, it would be another tick-in-the-box approach to corporate governance,“ says Sandeep Parekh, founder, Finsec Law Advisors.

 

The job profile of key managerial persons, including chairman, MD and CEO, are explicitly mentioned in the Articles ofAssociation (AoA) of all companies, as prescribed in the Companies Act. As AoA are drawn out by promoters, they invariably favours the largest shareholder in the company (that is, the promoters themselves). “So, if this recommendation is accepted by Sebi and implemented as a regulation, companies may need to amend their Articles of Association,“ says Kalpana Unadkat, partner, Khaitan & Co, a law firm. “Our companies are still promoter-driven… But they will have to change that over the next few years. Such changes are happening world over.“

 

Big-league businessmen such as Mukesh Ambani (Reliance Industries), Azim Premji (Wipro), Venu Srinivasan (TVS Motors), Sajjan Jindal (JSW), Venugopal Dhoot (Videocon), Kishore Biyani (Future Retail) and Gautam Adani (Adani Port), among others, will have to give away a part of their corporate roles if the recommendation is implemented.

 

“When we were growing the company, there was not much difference between an MD and a senior manager. But as the company grew and HR practices improved, roles changed quite a lot,“ explains Dhoot.

 

Dhoot wears two hats at board meetings.He’s the chairman of the board and the MD of the company. At board meetings, he claims to be “more of an MD.“

 

Dhoot, along with his executive directors, answers queries posed by the board.While the industrialist lauds the efforts of the committee, he is not very supportive of role-split idea. “If this has to work, the chairman has to be a non-executive right from the start. Having an executive chairman and an MD is not a good idea. A company cannot have two power centres at the top,“ he explains.

 

Apart from loss of control or power, some CMDs could also be worried about loss of salaries and perks once they are made non-executive chairmen. Nonexecutive chairman are only entitled to get sitting fees, and in some companies a profit-share, also known as commission.Shareholder approvals may be needed to raise the remuneration ofnon-executive chairmen beyond a certain limit. If the non-executive chairman is a promoter, he will also get a dividend, like all shareholders (See top earners table).

 

“I’ve no problem with splitting of roles but it should not be imposed across companies, without considering factors such as size of the business and majority stake position,“ says Arokiaswamy Velumani, CMD of Thyrocare Technologies. “If the company is at the growing stage, the promoter would like to have adequate control.He would like to run the company as well as helm the board. If the board is fine by it, why should it be a problem for anyone?“ Velumani, however, is quick to point out that if the CMD does not have enough time to manage everyday operations of the company, he should split the role and take up chairmanship.

 

Barring the UK, not many developed countries have laws that prevent one individual from assuming the role of a CMD. In the UK, most listed companies have non-executive chairmen. In the US, 50% of companies have CMDs.

 

“We’re entrepreneurs and we all like to work according to guidelines but then regulations are changing very fast. Too many variables are getting created in business now. This is a bit upsetting,“ laments Biyani of Future Retail.

 

The role-split recommendation may not affect banks, as they come under the Banking Regulations Act. The Act explicitly states that the chairperson shall be entrusted with the management of the bank. There is also no restriction on appointment of a CMD. “The Act has clarified that any such appointment of chairmanMD shall not be affected by requirements under other laws,“ affirms Unadkat of Khaitan & Co.

 

NEED FOR CONVICTION

 

According to business consultants, splitting of roles would not upset the working of companies, if done with care. “The roles of both the managing director and chairman will have to clearly be laid out, and both of them should stick to their script,“ says Paranjpe ofGrant Thornton.

 

However, even with all the perceived goodness the splitting of CMD could bring about, there is not much conviction as to how much it would improve board performance and corporate governance standards. The recommendation, in its present form, leaves gaping loopholes for power-hungry businessmen to squirm out.

 

“If they’re serious about it, they should not make a law of it. It should be more like a voluntary code of conduct; it should be comply-or-explain in style,“ sums up Parekh of Finsec.

 

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60% Indian Cos Don’t Have Basic Business Case for HR Initiatives: KPMG Survey

At a time when the disruptive business environment is driving companies to transform their human resources functions to adapt, a majority of Indian organisations remain stalled, with nearly 60% saying they do not even have a basic business case in place for HR initiatives.

These are among the key India findings of the KPMG HR Transformation Survey 2017. The India data is in line with global findings, which show 59% of surveyed executives saying that they do not have a basic business case for putting in place key HR processes.

In the past 18 months, although organisations have witnessed a rise in HR initiatives such as reengineering HR processes, about 85% of executives said this has not achieved the set return on investment, or RoI.

Between February and April this year, 887 executives from 48 countries participated in the HR Transformation Survey, with representation from 27 industries across Asia-Pacific, Europe, North America, Middle EastAfrica and Latin America. From India, 109 executives were surveyed.

Speaking about the India-speci fic report card findings, Vishalli Dongrie, partner, BPS-People and Change, KPMG in India, said, “Most respondents are currently involved in HR transformation.Overwhelmingly, most of them have a modest and traditional view of projecting HR transformation with systems and processes. Despite the urgency shown by CEOs, transformation is still not stirring in the context of supporting a business strategy or helping a company meet its business objectives.So, going forward, the manner in which HR addresses transformation will be pivotal.“

HR technology spends, in 89% of the cases in India, remained the same or rose across organisations since last year. The survey found that the biggest areas of investment expected for India, in 2017, are talent management, HR data and analytics, onboarding and payroll.

Most of the respondents said they believe that process and cognitive automation will drive the way HR services are offered in their respective organisations.They also said that talent acquisition, onboarding, learning and talent management are the areas where respective HRs are likely to aim and enhance in the next three years.

Source : The Economics Times

Date : 03-10-2017

5 WAYS TO Build a Rewarding Career

A rewarding career might mean different things to different people. However, any career becomes truly meaningful when it includes an amalgamation of different gratifying experiences. One should be able to learn, share, contribute and discover one’s true potential.Brinda Dasgupta brings you tips from the experts on how to build a meaningful and rewarding career.

1 Have A Hunger

There needs to be a constant enthusiasm and hunger to learn, unlearn and innovate.“You should be fearless in the pursuit of excellence and making a difference,“ says Jagjit Singh, chief people officer, PwC India. It is crucial to soak up as much knowledge as possible and apply it in your line of work.

2 Communication

An ability to work with diverse groups and respect divergent views is important. “Effective communication and influencing skills, handling ambiguity, managing diversity and leading multi-generational teams ­ these are the qualities that tomorrow’s employers will look for,“ says PwC’s Singh. Being able to communicate effectively is half the battle won.

3 Feedback

Be sure to regularly engage with your manager and proactively ask for feedback. “Conversations with your manager can revolve around what capabilities you have, how the world of work is changing and whether or not your career goals are realistic. You also need to ask how you can accelerate your learning,“ says Vipul Singh, head of HR, CSR and communications, ADP.

4 Company Help

Everyone has different aspirations and it’s important to keep the organisation in the loop via your people manager and your career coach, if any.“Be sure to speak to senior leaders on learning opportunities that are available, and take the help of mentors to action feedback-based improvements,“ says PwC’s Singh. You can also ask for options to work on different assignments, products, geographies or clients. These will help give you a professional edge.

5 Think Long Term

While it is a good idea to experiment on choices to formulate a direction for your career, it’s also equally important to see those choices through and consider what they mean in the long term. “It’s not just about the next job, it’s about the whole of your career, so it is crucial to have patience and take a holistic view of what each decision could mean,“ says ADP’s Singh.

Source : The Economic Times

Date : 03-10-2017

Campus hires get roles in hot technologies

Shortage Of Talent In Fields Like Big Data Forces Cos To Recruit Freshers & Train Them

Campus placements and available job roles for engineering college graduates are going through a big change, given the emergence of a variety of new technologies that are disrupting every industry .

The soaring demand for jobs in big data and analytics, artificial intelligence (AI), machine learning, digital marketing, and mobile and software development, is pushing companies to offer these roles to those coming out of college campuses. These were roles that were earlier offered primarily to midlevel professionals.

There were around 12,000 jobs available for freshers in India in each of these skill sets during the one year ending August 31, according to data collated from job platforms by online education provider Simplilearn. The numbers are almost double that for roles in cloud computing, quality management, and IT services, which were the leading roles previously .

“These numbers are a combination of what we have seen and the data gathered from our own platform and job listing websites like Naukri and Indeed. We looked at skills that industries have been talking about,“ said Kashyap Dalal, chief business officer at Simplilearn. Dalal said the largest employers of these skills are the top players in the IT services and BFSI (banking, financial services & insurance) spaces. But just about every company , which has recognised that these skills are essential to understand and serve customers better, are hiring for these roles. These include the many MNCs with engineering and R&D centres in India, and the slew of new retail MNCs entering to tap into India’s engineering talent. “I am seeing companies like Samsung going to colleges like BITS and IITs to hire for these roles,“ said Kaushik Satish, co founder at hiring firm Belong.

Harishankaran K, co-founder and CTO of HackerRank, which conducts recruitment tests on campuses for many product companies, including Adobe and Flipkart, says every single company that they work for, including startups, is trying to hire for these roles.

Companies are forming their own teams even in roles like digital marketing that were earlier outsourced to third parties. Other hot roles are in internet of things (IoT) and design of the user interface and user experience. The move to campuses for these roles is primarily because of the shortage of skills in the general technology ecosystem. The roles require basic knowledge in technology skills like advanced Excel, big data, open source data warehousing software Hive, programming languages Python and Java, search engine optimisation (SEO), and Android. Digital marketing requires people to have a basic knowledge of Google AdWords and SEO.

Some educational institutions teach a few of these skills. But a lot of the main skills are acquired postrecruitment, with in-house training. “Very few colleges have curriculum defined for such roles, so companies look for general problem-solving abilities -like ability to handle data and aptitude for algorithms,“ said Harishankaran.

The salary range for those taken into these roles is in the same Rs 2-4 lakh bracket that other freshers fall in. But the scope to jump to higher salary bands with just a few years of experience is high.

Satish says such disproportionate jumps happened three years ago in product management roles, those who are responsible for the strategy , road map and feature definition of a product or product line. “Many students in the top B-schools were then being hired for product manager roles, especially in e-commerce,“ he says.

Source : The Times Of India

Date : 02-10-2017

ICICI Lombard Begins Weak, Closes Strong on Listing Day

Shares of ICICI Lombard General Insurance Company , the country’s largest private non-life insurer, ended on a strong note after a weak debut on Wednesday . The stock ended at `680.10, about 2.9% above the initial public offer (IPO) price of `661 in a weak market. ICICI Lombard shares, which opened at `651 and fell to a low of `638.65 on the NSE, recovered as much as 8.7% to the day’s high of `694.

The `5,700-crore IPO of ICICI Lombard was subscribed 2.97 times.Analysts said the response was relatively moderate due to high valuations.

 

“We strongly believe that there is a very strong growth runway for that sector in general and within that ICICI Lombard stands in perfect space as being a market leader, not only across product categories but in terms of disclosure practices, reserving practices as well as claim settlement“ Debasish Purohit, head-financial institutions Group, BofA ML.

 

The total issue size is 8.62 crore shares -entirely an offer for sale by the insurer’s two main shareholders ICICI Bank and Canada’s Fairfax Financial Holdings. Bank of America Merrill Lynch, ICICI Securities and IIFL Holdings were the lead bankers. CLSA India, Edelweiss Financial Services and JM Financial also managed the issue.

 

Insurance market Lloyd’s of London pre-tax profit drops 16 per cent

LONDON: LLoyd’s of London reported a 16 percent fall in half-year pre-tax profit on Thursday, and faces a challenging end to 2017

given it is still to take into account the impact of hurricanes in the Caribbean and United States.
The unlisted company, which forms the world’s largest specialist insurance market, said it made 1.22 billion pounds ($1.63 billion) in profit before tax in the six months to the end of June, down from 1.46 billion pounds a year earlier. Its return on capital worsened to 8.9 pct from 11.7 pct.
Gross premiums rose to 18.9 billion pounds compared to 16.3 billion pounds last year, and its combined ratio –

a measure of profitability – improved to 96.9 pct from 98 pct in 2016 a year ago.
Combined ratio is a measure of underwriting profitability in which a level below 100 percent indicates a profit.
Lloyd’s of London Chief Executive Inga Beale said the results reflected the challenging conditions that have shaped the sector over recent years.
These include pressure on pricing from excess capital and low interest rates.
While the firm described the first six months of the year as a “relatively benign loss period”, it highlighted a series of powerful hurricanes that had recently ripped through the Caribbean and the U.S, causing catastrophic damage to property and infrastructure.

 

“The market is assessing claims and starting to make payments that will help local communities and get businesses back on their feet as quickly as possible,” Beale said. ($1 = 0.7482 pounds)

 

Building Your HR Resume While Building Your HR Career

here are essential building blocks within every great HR resume, as well as key actions you need to take to create one.

To be sure, every job seeker is unique and, therefore, so is every resume. There is no singletemplate, and it’s not a standard process. Rather, it’s customized to your personal experience, achievements, education, professional credentials and,most importantly, your current career objectives.

Think of your resume as a living document that will change in content, format and presentation over time as your career develops. Job requirements that were very important when you started your career might not be consequential enough toinclude 10 years later. You’ll constantly be adding new information and editing and/or deleting older information. Your resume will develop as your career progresses.

As you craft your HR resume, start by thinking strategically. A resume is not an autobiographical summary of your career. Rather, it is a document that markets your career, designed to showcase your qualifications and position you as a unique and memorable candidate.

Ask yourself what it is that makes you really good at what you do and then decide how you canhighlight that information to your best advantage when writing your resume.Yes, your responsibilities and general qualifications are important, but what matters most is how well you do those things, the impact you’ve had on organizations, the achievements you’ve delivered, your educational highlights, and any other details that will distinguish you from other candidates.

Getting Started 

Give your readers four important pieces of contact information at the top of your resume:

  • Name (including professional credentials such as SHRM-CP or MBA, if relevant).
  • Mobile phone number.
  • E-mail address.
  • LinkedIn profile URL.

Be certain that your e-mail address and LinkedIn profile are live links—someone can click on those from your resume and instantly e-mail you or read your profile.

Next, create a laser-focused summary. Your resume should deliver, instantly, who you are and what you want. You can most effectively do that with a headline such as:

HR Professional: Expertise in Recruitment, Staffing, Onboarding & Training

The above communicates that you have experience in those functions and that you’re targeting a job in which you will be essential. That headline clearly and concisely introduces you. Headlines are powerful ways to position yourself and your target job, and they make a great addition to every resume, no matter where you are in your career.

You can follow the headline with a short paragraph or two, a list of bullet points, or two columns of skills. This “Summary” section must include the information that makes you qualified, unique and memorable … your strategic qualities. The summary might include a distinguished credential, honor, presentation or other award that will serve to positively differentiate you within the pool of candidates, all of whom may have the same basic skills and qualifications that you possess. Focus on your key differentiators in the summary and throughout your resume.

Here’s a long-standing secret of professional resume writers: They always write the summary last. Why? Because it’s so much easier to do after you’ve written the “Education” and “Professional Experience” sections of your resume. How do you know what you want to showcase in the summary until you’ve written the content? You’ll be able to write your summary in half the time if you do it last.

Match Your Resume to Your Career Level 

Of course, the summary is the first section on your resume. But what comes next, education or professional experience? Follow these guidelines:

  • Graduating Students: Start with education and highlight your degree, major, minor/concentration (if relevant), academic honors, and college activities or leadership roles. You might also include four to six HR classes or a list of HR projects to strengthen this section. These additions are also a great way to capture keywords.
    If you’ve completed internships, you might include them with your education or, if appropriate, better showcase them in the “Professional Experience” section. You’ll have to decide based on your individual resume where the internships fit best so that you can get the most impact out of them.
  • Young Professionals: After you’ve worked for one to three years, you’ll want to move from a graduating student resume (where education comes first) into a professional resume (where professional experience is first).
    Chances are that you’ll also want to trim down the “extras” that you included in the Education section, like activities and coursework. Ask yourself if that information really matters three years post-graduation. Probably not, but it might in certain circumstances. What value does it deliver to your resume and the people who read it? Remember, everything in resume writing is customized to you, your career and your objectives.
  • Experienced Professionals: For these job seekers, there is never any question about where to position items on your resume. For 95 percent of those who have been in the workforce for a while, professional experience immediately follows the summary. 
    The only exception are individuals who recently earned graduate degrees and want to prominently position that information on their resumes. In that situation, you can put education first. My preference is to highlight the degree in the summary and leave education at the end of the resume so someone doesn’t glance and think “graduating student; limited experience.”

Use Job Descriptions to Explain Your Successes 

The responsibilities of each of your jobs (and internships, if you’re a graduating student or have limited experience) are vitally important to your resume and make up the “Professional Experience” section. Job descriptions communicate what you did in each position and are flush with keywords (essential words for resume-scanning systems, as you’ll read about below).

However, even more important than what you did is how well you did those jobs. Consider the difference in impact between these two sentences:

  • Assisted with implementation of new HRIS to automate company’s recruitment process.
  • Worked in partnership with technology teams to implement new HRIS and automate the company’s global recruitment process. Delivered project two months ahead of schedule and 15% under budget.

Here’s another example that focuses on the size and scope of responsibility versus just the function:

  • Trained all newly hired personnel in company HR policies, procedures and regulations.
  • Trained more than 200 newly hired personnel over a 3-year period in company policies, procedures and regulations.

Of course, not all job functions will have such achievements or particular details that you can add to enhance the impact of the content, but work hard to integrate that kind of information when and wherever possible. 

Pack It with Keywords 

Keywords are the foundation for resume-scanning software within applicant tracking systems (ATSs). If you’ve worked in any aspect of recruiting, you know that when anapplicant submits a resume in response to a job posting or forwards the resume to a recruiter, the resume will most likely  pass through the ATS. Make sure your resume has the right keywords to ensure that you’re selected as aqualified candidate. Fit in keywords from these categories:

  • Hard skills. These are your qualifications from work experience and education. They include: Human Resources, HR, Staffing, Recruitment, Onboarding, Compensation, Benefits, Training, Succession Planning, Employee Relations, Organizational Development, OD, Human Resource Information Systems/HRIS and Compliance.
    This category can also include technologies that you know beyond those that are specific to the HR profession.
    Note that this list includes the full names as well as commonly used acronyms such as HRIS. You never know which of these a company will use to search a resume so be certain to include both in your resume so you won’t be passed over.
  • Soft skills: These are general business skills that are essential to many HR jobs: Communications, Project Management, Organization, Leadership, Team Building, Conflict Resolution, Quality and Interpersonal Relationships.
  • Degrees, certifications and affiliations: Keyword scans will almost always look for college degrees (BS, BA, MBA). For professions such as HR, where there are well-recognized professional credentials, searches will also frequently include SHRM-CP, SHRM-SCP and other prominent designations that instantly add credibility to your resume. A scan might also search to see if you’re a member of any professional organizations.
  • Miscellaneous: Cities, states and ZIP codes are just a few of the oddball keywords that companies might use to search for candidates that meet their specific hiring requirements. Consider the company in Chicago that only wants to hire people within the local market. In that situation, a hiring manager will almost always use the state, cities and ZIP codes that are in the Chicago area to identify prime candidates in the company’s resume database.

The first three categories above are, by far, the most important and the ones that you can control. Be certain to integrate those keywords into the content of your resume in the “Summary” section, job descriptions, the “Education” section and more. They should naturally fit into the resume since these are the things you do, the skills you have and the knowledge you’ve amassed.

If you follow these recommendations, you’ll be able to write and format a great resume for yourself. Then, be certain to keep it current. Update it every six months or so, adding new jobs, achievements, qualifications, certifications, presentations and the like. You never know when that next great HR career opportunity might present itself, so be prepared!

 

Source:-Society for Human Management

Date:-26th September,2017