Hindustan Unilever Ltd (HUL) on Thursday announced the separation of the position of chairman of the board and the CEO and managing director, with Nitin Paranjpe appointed as the non-executive chairman of the company, while Sanjiv Mehta will continue as CEO and managing director.
Paranjpe, who is currently the chief operating officer of Unilever, will become the non-executive chairman of the company with effect from March 31, 2022.
His appointment was recommended by the nomination & remuneration committee (NRC) to the HUL board, which was accepted. The appointment is subject to approval of the shareholders which the company will seek as per applicable regulations, according to a press statement.
In January, Unilever had announced that Paranjpe will take on a new role as chief transformation officer and chief people office effective April 2022. He is also a member of the supervisory board of Heineken NV.
Commenting on Paranjpe’s appointment, Sanjiv Mehta, the chairman and managing director, HUL said, “We welcome Nitin back to HUL as the non-executive chairman. He brings in huge knowledge and experience which will enrich the deliberations and add value to the board.”
Paranjpe said, “It’s an honour and a privilege to be appointed as the non-executive chairman of HUL. I look forward to working closely with Sanjiv and the board to further strengthen the company and help navigate the challenges and opportunities in the years ahead.”
On February 15, the Securities and Exchange Board of India (Sebi) had made the requirement for separating the chairman and managing director/chief executive officer posts voluntary for companies. The move came in weeks ahead of the April 1, 2022 deadline by which the top 500 listed companies by market value had to have two separate, and unrelated, persons as chairman and MD/CEO.
There was reluctance in the corporate sector to comply with this governance rule despite it being proposed five years ago, and approved by Sebi in 2018. The market regulator had introduced the separation rule in March 2018 and gave India Inc time until April 2020 to comply. However, in 2020, the deadline was extended till 2022.
“There has been barely a 4% incremental improvement in compliance by the top 500 listed companies over the last two years. Hence, expecting the remaining about 46% of the top 500 listed companies to comply with these norms by the target date would be a tall order,” Sebi said in its statement after making the move voluntary.
