Who will call out the Boss?

SNS, as the 60-year-old L&T Chairman and Managing Director S N Subrahmanyan is known within the company, has raised quite a firestorm. He is not known to be the headline-seeking CEO living the high life, as some upstart CEOs tend to be. Here’s a head honcho who chairs a conglomerate with a glorious history of some 80 years, with more than 50,000 people operating across 50 countries and with an annual turnover of over Rs 2.2 lakh crore in 2024. It is almost unbelievable that such a senior leader would make the remarks of the kind he indeed has – that, if he had his way, he would make employees work on Sundays since the other option, in his words, is to sit at home and stare at your wife. Who would want to do that!

Never mind that many women are a proud part of the L&T success story; so SNS comes across very poorly in more ways than one. Deepika Padukone is right in pointing out that the attempted recovery from this sorry mess only made it worse. Instead of making light of the remarks, which included a prescription of putting in 90 hours a week, the attempt at explaining it as a call to nation-building points to the insidiousness of the remarks. Was SNS hiding behind or doing one better than the obnoxious call of IT leaders like N R Narayana Murthy in all seriousness seeking 70-hour weeks?

Even if we allow for the view that SNS is known for these kinds of detours and doesn’t really mean it, there are larger issues that come to the spotlight on what CEOs in India can get away with. The cases that come to light now and then offer but a tiny peek into a lot more that is wrong at India Inc. This is not how the strength of “India’s Yuva Shakti will make India a developed nation”, to quote Prime Minister Narendra Modi. These CEOs may want the political leadership to think they are singing the tune of the day but it’s in the interest of the political leadership to be wary of such pretence. These cases must be discussed so that all CXOs, not just SNS, are held to account and where required, restrained by strong regulatory measures.

The missing dissenters

Consider that SNS was paid a total remuneration of Rs 51.05 crore for FY 2023-24, which is 534.57 times the median remuneration at L&T. It represents growth of 43.11% over what was paid to him last year. The remuneration is the highest of all employees, some 40% higher than the second highest paid employee at L&T, who is the President and CFO R Shankar Raman. How are employees who on average get one-five-hundredth of this meant to react to SNS’ comments?

In this context, the first issue on the agenda for a “developed” India should be to put a ceiling on the amount CXOs pay themselves. Note that in the developed economy of Denmark, the home country of the L&T founders, the late Henning Holck-Larsen and Soren Toubro, the variable remuneration of executive directors comprises on average 37% of the fixed, according to a Deloitte report. In the case of the L&T CMD, it is 980% (salary of Rs 3.6 crore, commission of Rs 35.28 crore, as reported by L&T for 2024). Without grudging these packages, can it be fairly claimed that the performance of the group (the basis on which commission is usually calculated) is because of the leadership being provided?

The next significant issue that comes up is the complete absence of dissent in India’s corporates. The language of sustainability, the appeal to innovativeness and the claim of DEI (Diversity, Equity and Inclusion) policies all ring hollow when it becomes clear that no one in Indian corporations challenges the boss. Why? Because questions are not encouraged, building a culture where hierarchy rules, the boss is to be always deemed right, and creativity almost by definition cannot thrive.

The inner collapse of L&T is seen from the fact that no one challenged SNS in the undated video. The problem is not that the video leaked; it is that SNS was not asked how he could even make that statement. He got away for the moment, as our CEOs often do, only for the world outside to pull him down. For India to harness the power and thinking of a new generation of leaders, the older lot will have to learn to live with more questions, with less judgement and some deeper realisation that they are not quite as extraordinary as they may imagine themselves to be. Since there is no evidence that is likely to happen anytime soon, the Indian establishment must act with a new set of regulations to bring the house to order.

(The writer is the Managing Editor of The Billion Press)