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The Nepotism Debate – A Corporate Point of View

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Every few full moons, the debate on nepotism arrives on national television. This time it was the alleged suicide of actor Sushant Singh Rajput that nudged it to forth. Claims and counterclaims flew thick and fast about studio owners using their power ruthlessly to foist undeserving star kids while ignoring the talented ones who were knocking on the door. 

Now, turn your heads towards the country’s political firmament and what do you see? Not one, not two, but a fourth generation leader who is holding forth. Indian politicians set new standards (or plumb new depths) of promoting a sense of entitlement as sons, daughters, nephews and nieces of aging politicians are artificially prepared to take on the mantle. 

But, these aspects aren’t exactly what I am commenting on. Why? Because my argument is that our society and we who make it up are nepotistic by nature. And the most shining example of it is our corporate India. 

If we take the Indian film industry logic and superimpose the Indian business houses, we see some striking similarities there. The old business houses (all of them, without exception) have always fostered their own kith and kin, while using the outsiders for their considerable intellect. 

Not that the outsiders do not get opportunities, they do. However, there is a glass ceiling which they just cannot break and it is called the family. As they say, “blood is thicker than water”, No matter how talented a professional one is, there is always the next of kin waiting round the corner to claim what is rightfully theirs. To become Chairman, you need the right surname. 

Even the new-age (not really new now, I suppose)  IT industry in India is no exception. And some of the names that come to mind are so hallowed that set the Gold standard for corporate governance. So, what’s the big fuss? Is it anybody’s argument that a twenty something scion of a business house is smarter, more experienced and had better acumen than someone with years of experience in the same company, industry and the business? 

Can we even begin to argue that Wipro did not have a smarter and more accomplished Chairman than the Son of the founder, or that Shiv Nadar, in my opinion, the smartest man in the Indian IT industry, tried and failed to find a more accomplished successor to himself and perforce had to fall back on his child?

The simple explanation is that as primary shareholders, Premji and Nadar sought people who would manage their family interests on the Boards of their enterprises. Both acknowledge that there are smarter professionals who probably can run the business better but clearly cannot or will not work towards safeguarding their interests. 

However, when it comes to protecting shareholder’s interests, it is natural for the individual concerned to depend upon his kith and kin rather than an outsider, however good or bad (s)he may be as a professional.

If we accept that argument then the nepotism theory in the film industry also does not wash. The studio heads are simply following the money trail and the taste of the audience and if the latter shows preference for a vapid, vacuous starkid over a talented and brilliant outsider, then it will be a brave (and possibly) stupid studio owner who will put his money on the outsider.

Warren Buffet and Bill Gates be damned, if they couldn’t get their kith or kin to carry forth the legacy. 

By the way, my daughter Malavika is already part of Trivone, which owns CXOToday. 

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