Engineering & construction conglomerate Larsen & Toubro (L&T) is putting in place an interim leadership team to steer the company until 2015. Six out of its eight executive directors on the board are retiring within three years, including chairman & managing director AM Naik, who will leave in 2012.

Global consultant McKinsey & Company is working on a succession plan for the company. In an interview with FE, Naik said the leadership team will comprise two from the current board of directors and some others who are being groomed for the positions.

The interim team is seen as necessary as investors have been worried that the exit of key executives in a span of three years would create a leadership vacuum in the company. Two of the remaining executive directors on the board will also retire by 2015.

Naik, credited with turning around the firm from a languishing giant to an agile and focused conglomerate, wants to plug any leadership gap, much before he spells out the company?s ?five-year plan? for 2010-2015. He will announce the business blueprint next March, but work on the plan has already begun.

Continuity of leadership will be crucial for the expansion of one of the few non-family run business conglomerates in the country. The company, with interests in construction to IT and nuclear business and employing over 40,000, already faces stiff competition from Chinese and Korean engineering giants as India exponentially expands its market for large infrastructure projects.

The interim leadership team is expected to include Ravi Uppal, brought in to head L&T Power from ABB?s global group executive committee. Incidentally, Uppal reports directly to Naik, although he is not on the board of L&T. Also, it?s uncommon for L&T to place executives from ?outside? in charge of crucial portfolios.

By 2015, the interim management will be ready to pass the baton to a younger crop. ?McKinsey is working with us in senior and middle management programme development. Training is on for more than 80 people and the next batch is about to start. I am personally mentor to seven or eight,?? Naik said.

The board of directors now comprises, apart from Naik, YM Deosthalee, wholetime director & CFO, JP Nayak, whole-time director & president?machinery & industrial products and K Venkataramanan, wholetime director & president-engineering & construction projects.

Other executive directors are RN Mukhija, whole time director & president-electrical & electronics, KV Rangaswamy, wholetime director & president-construction, VK Magapu, senior executive VP?IT & engineering services, and MV Kotwal, wholetime director & senior executive VP, heavy engineering. Among these, all except Deosthalee and Kotwal would retire by 2012, say sources. Apart from these, there are nine non-executive directors on the company?s board.

Naik, now 67, joined the company as a junior engineer in 1965, and moved up the ladder, becoming chairman in 2003. He spearheaded the move to exit non-core businesses and de-merged the cement business, which was subsequently sold to the AV Birla group. Lately, he is credited with the division of L&T into 12 operating units, each having the freedom to take up and execute projects, except for large orders to be vetted by the board. Naik said the company is investing close to Rs 10,000 crore in the engineering sector this year to offer cutting-edge technologies to compete with the Chinese, Korean and US counterparts.

For FY 2010, The L&T group will have revenues of up to Rs 45,000 crore, and an order book position of Rs 85,000 crore, 25% more than that of the current financial year. L&T had net sales of Rs 40,779.87 crore in FY 2009 and a net profit of Rs 3,707 crore.