Our philosophy is that business must come before family

''Not All Can Run a Firm''
Malvinder and Shivinder Singh
Director, (Global Licensing & Business Development), Ranbaxy and COO, Fortis Healthcare

After your father's death, your grandfather, Bhai Mohan Singh, wanted the two of you on the Ranbaxy board. Why did you choose not to push for that?

Shivinder: Granddad feels that what has been built by the family must remain in the hands of the family. But we want to work as professionals. You have to be a player before being a team leader.

Do you see Ranbaxy as a family business?

Malvinder: Our philosophy is that business must come before the family. My father was a professional with some equity interest. But not all family members can run a business. In that sense, succession should distinguish ownership from management.

Shivinder: At the end of the day, one has to deliver. But promoters have a better drive to manage a company.

What about your children?

Shivinder: We will bring up our kids with the same values. Our children are toddlers now. But once they grow up, they will have to perform, and deliver the goods.

Do you see yourself heading Ranbaxy and being on the company's board soon?

Malvinder: I believe I have worked my way up. And I see myself moving up the ladder in order to lead the company. In what role and designation, I don't know.

A promoter's child gets treated as a promoter even if she joins as a trainee

''All For Good Governance''
Sunil Mittal, Group MD, Bharti Enterprises

You've often been quoted as saying that you may not pass on your business to your children. Don't you view the group as a family business?

First of all, there are several other promoters in Bharti besides the Mittals, like SingTel, Warburg Pincus, International Finance Corp, Asian Infrastructure Fund, and New York Life Insurance. Second, the character of the business is not designed to be a family business. It's run by professionals.

Doesn't the family take all strategic decisions?

We have divided the business into three parts: operations, management, and governance. I left the operations part some 18 months back. With age, I will leave the management part and focus only on governance. It's the hundreds of professionals we've employed who take strategic decisions.

What if your children want to be part of the family business?

My children are too young. My daughter is 16 and my two sons are 14. They will choose their own careers. But if they are keen on joining Bharti, they'll first have to acquire a professional degree and prove themselves at another company. Then again, I feel that a promoter's child gets treated like a promoter, whether she/he joins a company as a trainee or at some senior position. But by the time my children complete their education, the character of the Bharti group would have evolved. Our shareholding, which is at the moment 46 per cent, would have come down.

The future of family business lies in its transforming onself into aggressive VCs

''Competence Matters''
Anand Mahindra, Vice Chairman, Mahindra & Mahindra

What should be the role played by a family in a business, and what should be the function of professionals?

It is very clear that the family's role in a business depends upon both the inclination and the competence of any particular family member. If a family is truly committed to maximising shareholder wealth it would be up to it to ensure that the professional or family member best qualified for a particular position was installed in that position. But there are certain corporate level jobs, for example those where a great deal of communication or pr is required, to which family members do bring in some additional advantages.

How should a business family go about the task of creating shareholder value?

The future of Indian business families lies in transforming themselves into aggressive venture capitalists. The longer families delay in making the transformation, the more they will miss out on opportunities to accumulate greater wealth.

What future do you see for the Indian family enterprise beyond the third generation?

It's simply a matter of increased complexity of relationships due to the increasing number of participants. As families expand, if subsequent generations truly carry the entrepreneurial genes of their ancestors, then they too would hanker to make their own reputations and satisfy their own entrepreneurial aspirations by creating their own businesses.

Family's role lies in assessing opportunities and allocating the capital

''Commitment Is Strength''
Harsh Goenka, Vice Chairman, RPG Group

What role does the family play in the RPG group?

The strength of family-managed businesses is its commitment to values. The family plays a key role of inculcating those values. At RPG, the businesses are run by a top-level management board comprising both family and professionals.

How has the family's role changed post-1991?

Well, it is just that at RPG, liberalisation coincided with the group's own restructuring, which happened in the early nineties. The role of the family is mainly in assessing the opportunities and allocating the financial resources and the people resources.

How do you see the RPG group evolving in the years ahead, given that studies show that family businesses rarely survive the third generation?

The group in its new identity began only around 1980. It is still very young.

What has the RPG group done to promote fairness, transparency, and accountability?

The RPG group was amongst the first to implement a detailed corporate governance policy two years back. We have also put in place the 'RPG Values', which is fundamentally a code of conduct for businesses across the group. We are addressing the issue of inter-corporate investments in a very serious manner. Transparency is a journey and we are well on our way.