Corporates navigating the uncharted waters of geo-politics, sustainability and regulation have discovered new sailors to steer their ships: Experienced bureaucrats who have been there, done it and are willing to take up the challenge of the private sector.
Companies across sectors ? from IT, banking auto and financial markets ? are queuing up outside the doors of key ex-bureaucrats and technocrats with juicy offers to join them at senior non-executive positions.
Last week, IT major Wipro named Shyam Saran, former foreign secretary and Prime Minister?s special envoy on climate change to its board of directors. Early this year, former finance secretary Vijay Kelkar joined the board of Tata Consultancy Services and became an independent director at JM Financial. Recently, he also took up the post of non-executive chairman at the National Stock Exchange.
Former finance secretary Ashok Jha who had joined Hyundai Motor India as president in 2007 moved to MCX Stock Exchange as non-executive chairman last year. This May, he was also appointed non-executive advisor at Daiwa Capital markets, the wholly-owned investment banking arm of Daiwa Securities Group. Former finance secretary Adarsh Kishore took over as non-executive chairman of Axis Bank this January and joined life insurer Aegon Religare as an independent director this April.
Azim Premji, chairman, Wipro in his statement appointing Saran pretty much summed up why private firms are keen on ex-bureaucrats: ?He (Saran) brings in a unique combination of rich exposure to international policy, vast experience to diverse government functions and deep insight on sustainability. We are sure that Wipro will benefit immensely from his experience, knowledge and wisdom.?
Saran said in the statement that he was ?looking forward to working with Wipro and contribute to its future business strategy and growth.?
R Suresh, managing director of Mumbai-based executive search firm Stanton Chase, agrees that the trend of private firms hiring talent from the government is on the rise: ?The business landscape is changing. Public-private-partnerships imply a significant interface with the government. In most arenas, the government?s role is either that of a sponsor, regulator or a conscience keeper and a civil service officer works out to be the best fit for such an interface. Some of the talent there is so good that we wonder why we didn?t think of them earlier.?
Considering that Wipro has been betting big on ecology, getting PM?s special envoy on climate change on board with his ?deep insight on sustainability? means a lot. According to a UN report, the global market for environmental products and services is projected to double from the current $1.37 trillion per year to $2.74 trillion by 2020. With Wipro Water and Wipro Eco Energy already in place, more news on the sustainability front is expected to trickle after July 1, when Saran joins the team.
Takashi Hibino, deputy president of Daiwa Capital Markets is clear about his expectations from Ashok Jha to help Daiwa become a leading Asian investment bank: ?With a career in the civil services spanning almost 40 years, Mr Jha has a depth of experience and local insight that is critical to growing our presence in this important market, and I am delighted with his appointment to realise our commitment to become the leading Asian investment bank.?
According to Deepak Gupta, office managing director at Korn/Ferry International, apart from the bureaucrats? rich experience and good work in government, the private sector is keen on them since they ?know rules and regulations and have good contacts within the government as well as the industry. And that makes them fairly effective in what they are doing.?
The incentive structure in the private space more than matches the charm of babudom. ?For the post of an MD, we are easily looking at a couple of crores plus incentives like stock options,? adds Suresh. However, he is quick to dismiss that the key results areas (KRAs) for ex-babus are essentially lobbying or liaisoning ? though it is something Gupta chooses to term ?reality.?
Dhananjay Bansod, chief people officer, Deloitte explains why the movement from the public to the private space is increasingly becoming seamless: ?There are several stakeholders demanding effective governance from the private as well as the public sector. Businessmen aren?t there just to make money anymore. They too are fulfilling their social responsibility. So, increasingly, the skills required on either side are becoming inter-fungible.?
Jyoti Bowen Nath, executive director at Gilbert Tweed Associates, a leading headhunter, remembers placing a bureaucrat with a global financial major five years ago: ?Back then, bureaucrats weren?t really open to options in the private sector. It?s much easier now and there is a lot of demand for retired bureaucrats in the private sector.?
Under India?s pension rules, a civil servant joining the private sector within two years of retirement must seek advance government permission. ?Normally, you shouldn?t have any official dealings with the private firm you join,? says SR Wadhwa. Wadhwa, former income-tax chief commissioner retired as chairman, Income-Tax Settlement Commission in 1997. He is currently on the boards of several companies, including Deepak Fertilisers and Smartchem Technologies. ?We should follow the American model where it is easy for people to shift from the private to the public domain and vice-versa. Government servants in India have very valuable experience and the government should encourage them to utilise it by working post-retirement so that the country can benefit even more from their experience.?