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Reliance Industries: Daughter rises in Mukesh Ambani’s succession plan
By Nikhil InamdarBBC Business Correspondent, Mumbai
Image caption,
Mukesh Ambani (right) with his wife and three children
In the clearest hint of a succession roadmap, Indian multi-billionaire Mukesh Ambani carved out definite roles for each of his three children at the annual general meeting of his $220bn (£193bn) retail-to-refining conglomerate in August.
Mr Ambani's older twins, Akash and Isha Ambani, will lead Reliance Industries Ltd's telecommunications and retail businesses respectively, while his youngest son Anant is being groomed to handle new energy.
Corporate India's most anticipated leadership transition - Reliance is one of India's most valuable companies by market valuation - has been in the works for some time. The particulars of the impending wealth transfer are sketchy at the moment, and largely in the realm of speculation.
But what is palpable is Mr Ambani's desire to avoid a repeat playout of history: the acrimonious inheritance battle he waged with his younger brother 20 years ago, after their father died without leaving a will.
Isha Ambani's leadership role is also in stark contrast to the largely peripheral role that other women from her family have played in the core business until now.
Over the past two decades, there has been a generational shift in the number of prominent Indian industrial families bringing women into the corner office - though analysts say there is still a long way to go.
Planning ahead
Mr Ambani, 65, is actively involved in running Reliance as its chairman and managing director and could have bought more time before thrusting his children into the limelight.But unlike many Asian patriarchs who hold a tight control over their wealth till the end, he represents a "new generation of family business leaders" in Asia who've witnessed succession feuds and want to take "every step possible" to make the journey for their children smooth, says Prof Kavil Ramachandran, a senior adviser at the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business.
Image caption,
Mukesh Ambani and his brother Anil had waged an acrimonious inheritance battle
From the Tata group - which owns Jaguar and Land Rover - to the Singhania family that's behind textiles major Raymond Group, India Inc has seen a series of rancorous succession battles over the past two decades. These have led to messy lawsuits and long-winded arbitration proceedings that have proven to be a costly overhang on shareholders.
But wealthy Asian families like the Ambanis are once bitten, twice shy, say experts.
The issue of intergenerational wealth transfer is also "gaining even more significance in a Covid-19 context," according to Hubbis, which provides wealth consulting to high net worth Asians.
While fewer than half of Asian families have succession plans in place, the pandemic has encouraged 84% of India's ultra-wealthy to reassess how they will transfer their wealth, global property consultancy Knight Frank estimates.
A gender shift
What's also being reassessed, it appears, is the role of women during succession.Speaking of the leadership roles his three children were assuming, Mr Ambani in his speech said "they are first among equals in a young team of leaders and professionals who are already doing amazing things at Reliance".
Isha Ambani's rise as an "equal" to her brothers is a clear shift from her older female relatives - her aunts got married into other business families long before the inheritance dispute split the family.
Image caption,
Isha Ambani will lead the Reliance conglomerate's retail business
Ms Ambani, a Yale graduate with a McKinsey stint, on the other hand has been groomed to join the Reliance empire for several years now.
Given the influence the Ambanis wield, especially within the traditional Gujarati mercantile community, this gender shift is likely to have a "strong messaging effect," says Prof Ramachandran.
Sandeep Nerlekar, founder and managing director of the legacy planning firm Terentia, who has been advising family-owned corporates on succession for over a decade and a half, agrees that it "is a significant move that will set the tone for other business families".
Ms Ambani is part of a new generation of women from big business families who have taken on senior leadership roles. This includes Nisaba Godrej,
This wave of change is being influenced by a number of forces, say experts - this includes traditional joint families giving way to nuclear set-ups, and a rise in girls getting educated.
More women are also "being vocal about their rights and capabilities without worrying about feathers being ruffled", says
Ms Goenka herself got married at the age of 18 and joined her husband's business only after her children grew up, when she decided to pursue management education at the Harvard Business School.
Image caption,
Dipali Goenka says more women are speaking up about their rights
But there is still a long way to go. Eight in 10 families in India still continue to harbour a bias towards the male child when it comes to estate planning, Mr Nerlekar says, citing a Terentia study. "Even wealth distribution between a daughter and a son is not equal," he adds.
The bitter public battle for a board seat by Valli Arunachalam, one of the heirs to the Chennai-based Murugappa Group, only underscores how difficult it is for Indian women to break the glass ceiling.
Legal changes - such as The Hindu Succession Amendment Act, 2005 which removed gender disparity in ownership and gave women equal rights of inheritance, irrespective of marital status - can help smooth the way for women, experts say.
Regulatory requirements to induct women on company boards is increasing representation as well.
But experts say this is a battle against entrenched patriarchy, and one that has only just begun.
Reliance Industries: Daughter rises in Mukesh Ambani’s succession plan
Isha Ambani has been groomed to join the Reliance empire, unlike other women in her family.
www.bbc.co.uk
