Reliance: Succeeding In Succession

Updated: Jun 27 2002, 05:30am hrs
At a time when succession planning in business family groups have always not been smooth affairs, the clear-cut transition that has been effected so far at the Rs 70,000 crore Reliance Industries Ltd (RIL) could be a text-book case study of how to manage this. In fact, this is a plan that has been slowly and deliberately set in place over the last few years. One trigger for the urgent need for it was particularly felt after the 1986 stroke that chairman Dhirubhai Hirachand Ambani suffered.

For starters, since the early nineties, the management roles of both the sons, RIL managing director Anil Ambani (42) and vice chairman and managing director Mukesh (44), had been clearly defined. And in recent times, the responsibility of the elder son, Mukesh Ambani has been more sharply focussed, with him, for example, taking over as the chairman of recently reconstituted IPCL. This could also be a pointer to future developments in succession.

Traditionally, part of the grooming and the division of responsibilities was done taking into account the personal strengths of each of the sons. While Mukesh is an engineer from Stanford University, his role has accordingly focussed on manufacturing, engineering and issues related to implementation of projects. On the other hand, with the younger Anila management graduate from Wharton Schoolalways in the limelight and more accessible to the media and the external community, he has traditionally more been involved in the areas of finance, marketing, investor and public relations. But both the sons have however always taken turns in interacting with bureaucrats and political leaders.

With these broad responsibilities laid out, what then has been the role of the chairman In the last few years in particular, he had largely confined himself to giving broad policy directions, laying down the broad guidelines and intent in major decisions like the takeover of IPCL for example and interacting with heads of states and other business leaders from within the country and outside when they visit Mumbai, when most often they visit their home in Sea Wind building at Colaba, Mumbai.

Apart from this, the three family members discuss some of the urgent issues on the three or four days a week that Mr Ambani visits the Maker Chamber corporate headquarters in the Nariman Point headquarters. This is normally done over a traditional Gujarati lunch that is normally packed from their home.

Indeed, till early this year it was thought by Reliance watchers that in a final act of succession planning, the mother company Reliance Industries would go to Mukesh Ambani and Reliance Petroleum would be handed to Anil Ambani. But with the announcement of the merger of the two companies early this year, that was not to be. So, the ongoing division of responsibilities have so far remained intact.

Apart from the three, the other family members who are actively involved in the operations of the group are Nikhil and Hital Meswani (sons of Dhirubhais sister) who are executive directors of RIL and RPL. Initially, while they worked with Anil and Mukesh, in recent times, both of them were designated executive directors and have independent responsibilities.

The two daughters of Mr Dhirubhai AmbaniDipti and Ninaand their husbands Raj Salgaocar and Shyam Kotharihowever have had no say from the beginning in the operations of the company. However, in recent times the wives of the two sons, Nita and Tina Ambani, have been involved to some extent with some of the group activties like charity and marketing-related ones. Finally, Kokilabehn, Mr Ambanis wife has confined her role over the years to home. But often, she has also been a keen host when important visitors go there.

Today, despite the market nervousness, with the ground prepared for a deliberated succession plan, the Reliance group should be on solid foundation.