Corporate Legacy: True Leaders Always Strive To Make A Difference
When billionaires such as Bill Gates and Warren Buffet pledged to donate a bulk of their personal fortune, they set the philanthropy ball rolling the world over, especially in India. The momentum of corporate philanthropy had slowed down in India in the 90s, but the past decade has changed the corporate approach to social responsibility in India. The focus has not been on increasing the money pool alone, but also on the ability of successful corporate leaders to organise philanthropy in the most effective manner to have maximum social impact.
In this context, the legacy of top three leaders of India Inc. — Ratan Tata, N. R. Narayana Murthy and K. V. Kamath — becomes even more valuable. Their history is different, but each has, in his own way, transformed the corporate landscape in India.
Ratan Tata took over the reins of the Tata conglomerate from J. R. D. Tata in 1991 amidst the globalisation wave and a series of economic reforms within India. In the next two decades, as the chairman of Tata Sons, he streamlined the varied businesses under one head to create a global corporation with operations in more than 100 countries. The group’s global revenues contributed only 10 per cent in 1991 when Ratan Tata took over, but when he left in 2012, the figure had touched 67 per cent.
In sharp contrast to the dynastic succession of Tata, Murthy founded Infosys, a global software consulting company that became the symbol of India’s IT glory. Under his leadership, it grew from a capital of $250 to become a $10.1-billion company. He laid the foundation of IT services outsourcing through his global delivery model. He was even described by TIME magazine as the ‘Father of Indian IT Sector’.
Kamath, on the other hand, redefined the Indian banking system by building the largest private bank of India out of a slumbering organisation. He restructured it and initiated strategies to tap the changing realties of the market. On his watch, ICICI became the first Indian financial institution to go online and offer a multi-channel delivery system to its customers. Starting with just 5,000 online customers, ICICI today serves over 2.5 million people online.
The corporate legacies of these leaders have been comprehensively examined over the years. Here’s an interesting insight on their initiatives in the social development space.
Ratan Tata’s move to philanthropy through Tata trusts — one of the oldest and largest philanthropic institutions in the country — was a part of the dynastic tradition. However, his remarkable leadership has not only fine-tuned philanthropy within the trust but also influenced a new-generation of philanthropists. His constant focus on the impact and efficacy of the charity endeavours has given a new direction to the trusts. His five point guide to effective philanthropy includes: enhanced scale; measurable impact; a finite period of support to projects; ensuring that the projects are sustained even after the trusts have withdrawn from them; and benchmarking with global peers and best practices. The group today runs and supports programmes in the sphere of health, education, livelihoods and natural resource management. The funds have substantially gone up from about Rs 40 million a year in 1996 to Rs 7 billion a year now.
Murthy has always represented the ethos of larger good. His ‘Employees Stock Option Scheme’ not only made his drivers, office assistants and secretaries millionaires but also made them stakeholders in the billion-dollar company. The first generation IT tycoon Murthy and his family are known for their philanthropic initiatives. In 2014, they sold off their shares (worth millions) to fund philanthropic activities and encourage entrepreneurship. While Infosys Science Foundation, created in 2009 with a Rs100-crore corpus, honours outstanding achievements of researchers and scientists every year, Infosys Foundation supports a wide range of programmes in the areas of education, rural development, healthcare, arts and culture, and destitute care. Over the years, the latter has widened its presence to remote villages through initiatives such as libraries in rural schools, computer literacy programmes, mid-day meal programmes and financial assistance for social enterprises.
Unlike the other two, Kamath’s approach to philanthropy is ingrained in his business decisions. He emphasises on ‘building a better world encompassing philanthropy and profitability at the same time’. As the ICICI head, he pushed for international quality financial services to different classes of customers. For the first time ever, the rural community was included in the expansion plans of a private bank. He focused on using technology and partnerships with multinational and local agricultural institutions to tap into the micro- banking space in rural India. Under his leadership, ICICI Foundation set its aim at wider participation of India’s poor in social and economic processes.
The expansive philanthropic work of these three characteristically different individuals can be seen as a reflection of the effective altruism movement in India. Effective altruism is a burgeoning social movement around the world that seeks to maximise the impact of one’s altruistic actions based on evidence and reasoning. It takes the traditional altruism a step forward to change the way we do good. The movement has gained momentum across the world with notable associations like Peter Singer, William MacAskill, etc. While the traditional altruistic spaces were limited to religious and non-profit organisations, effective altruism opens up the space to include work in policy, politics and even ‘earning to give’. Philanthropists like Tata, Murthy, Kamath have effectively used their millions of corporate profits to transform millions of lives in the country. They have moved beyond their corporate roles to redefining the development space in a significant manner.
This article was published in BW Businessworld issue dated 'Feb. 23, 2017' with cover story titled 'INDIA’S PRIVATE EQUITY RAINMAKERS'