COMPANY SPECIAL .......................Going the extra mile: Mahindra & Mahindra’s board puts in longer hours for speedy returns

Going the extra mile: Mahindra & Mahindra’s board puts in longer hours for speedy returns

Mahindra & Mahindra's board has always tended to be ahead of its times. For example, it had an audit committee and remuneration committee much before they became mandatory. Even today, the Board has a technology committee that looks into the company's research and development initiatives, an extra bit of work it is not required to do, but does anyway. Most of these progressive measures are thanks to chairman emeritus Keshub Mahindra, who spent 60 active years on M&M's Board and on the Boards of many other major companies. "I was influenced by American Boards. The only development I did not follow was the system of quarterly results. I resisted that till it became mandatory," he says.

Nothing stands still at M&M, which means the has to work hard to keep up. The company owns hundreds of subsidiaries, which contribute to half its profits, and the M&M Board plays an active role in all of them. The acquisition of Satyam, for example, was through subsidiary Tech MahindraBSE 1.28 %, but it was the M&M Board which took the final decision. Ssangyong Motor Company inKorea was another acquisition that was closely scrutinised by the Board. And there have been many other, smaller acquisitioons, most of which went through and some which failed to pass muster with the Board. 

Independent director Ravindra Kulkarni, who is also senior partner at the law firm Khaitan & Co, recalls an acquisition proposed by the management which he was unhappy with because he knew the company concerned to be of questionable repute. The proposal was sent back for reconsideration by then chairman Keshub Mahindra and then quietly dropped. "The Board stands by the management and supports the entrepreneurial spirit of M&M, but not all proposals go through," he says.
Kulkarni is a member of several other corporate boards, but rates M&M as his most complex assignment by far. "M&M has such a large number of subsdiaries that it becomes difficult to oversee all of them. I don't know whether we've really been able to crack this problem," he says.

M&M Board meetings are generally spread over two days, with the first day reserved for committee meetings and the second day for the Board meeting. A measure of M&M readiness for discussion and dissent at Board level is the recent induction of Vishakha Desai , global head of the Asia Society. Desai is the first woman on the Board and is known for her strong views on sustainability and environment. The past year has seen the resignation of veterans N Vaghul and Ashok Ganguly, Murugappan has taken charge of the technology committee. He recalls being unable to attend the Board meeting hurriedly convened to discuss making the bid for Satyam: "I made it a point to attend via audio conferencing. Most of us have a 90% attendance record. We don't miss meetings if we can help it."

By Dibeyendu Ganguly, CD ET Bureau | 31 Oct, 2014