Mumbai: Anand Mahindra will step down as chairman of Mahindra and Mahindra Ltd (M&M) to take up a non-executive role effective 1 April 2020 as part of a leadership transition plan that he said will see him becoming the group’s “conscience keeper”.
Pawan Kumar Goenka, the managing director of the diversified group with a presence across automobiles, farm equipment, IT and financials services, will also serve as chief executive in a transition arrangement until his retirement on 1 April 2021.
Anish Shah, president, strategy, of the Mahindra Group, will replace V.S. Parthasarathy as the group chief financial officer from 1 April 2020 for a year, before taking over from Goenka as the MD and CEO of M&M for a period of four years.
Friday’s announcement brings the curtain down on succession planning for the group, first indicated by Mahindra in 2017, when he said that the group’s executive board was aware of his choice of successor.
In an exchange notification on Friday, M&M said Mahindra will transition to the role of non-executive chairman from executive chairman from 1 April 2020.
According to revised Securities and Exchange Board of India (Sebi) norms, the top 500 listed companies will have to ensure the chairperson is a non-executive director from 1 April 2020. Mahindra, who took over from his uncle Keshub Mahindra, turns 65 next year.
“As non-executive chairman, Anand Mahindra will serve as a mentor and sounding board for the managing director on issues to be presented to the board, especially in the areas of strategic planning, risk mitigation and external interface. He will retire on 1 April 2021. Goenka will continue to retain direct responsibility of Ssangyong Motors as chairman of its board until his retirement date,” the company said.
Shah is currently responsible for developing strategy and building capabilities, such as digitization, data sciences and enabling synergies across group companies. He also leads the risk management and performance review functions at M&M.
Before joining the company, Shah had a 14-year stint at GE Capital, where he held several leadership positions in both the US and global units before becoming president and CEO of the India unit.
Rajesh Jejurikar, president, farm equipment, M&M, will join the company board as executive director (auto and farm sectors), with direct operational responsibility and accountability for the sectors. He will report to Goenka during the transition year, and then to Shah from 2 April 2021. C.P. Gurnani, MD and CEO of Tech Mahindra Ltd, will also join the M&M Board as a non-executive director from 1 April 2020.
“This plan reflects M&M’s depth of management talent and will ensure continuity in terms of culture, values, governance and operational effectiveness,” Mahindra said in a statement announcing the changes. “In my new role, I see myself as the conscience keeper of the Mahindra Group, as the custodian of its values and the watchdog of the interests of its shareholders. Internal audit will continue to report to me. I will continue to exercise oversight through the board,” he added.
M&M had constituted a governance, nomination and remuneration committee led by M.M. Murugappan, to interview internal candidates for the top jobs, besides evaluating external candidates, before zeroing down on the names announced on Friday. M&M said more changes, both at the group corporate office and auto and farm sectors, will be announced on 23 December.