Axis Bank: The Succession Planning Fiasco

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"I think those of us who have built the bank should be looked at for leadership in succession as well. But that viewpoint is seen as dogmatic... I feel very strongly that our people have built the bank and therefore, the succession must be from within." ¹

- Pangal Jayendra Nayak (Nayak), ex-chairman and managing director, Axis Bank Ltd., in April 2009.

"When we insisted that succession should be a planned move, if only he [Nayak] had listened to us and taken us into confidence about what he had in mind, we may well have supported his candidate. But to mandate a nominations committee to select a successor, to stay out of the process, and then insist at the last moment that we accept his view was not fair." ²

- A Director, Axis Bank board, in May 2009.

An Unexpected Departure? On April 20, 2009, Pangal Jayendra Nayak (Nayak), the then chairman and managing director (CMD) of Axis Bank Ltd.3 (Axis Bank), the third largest private sector bank in India, announced his decision to quit over the appointment of his successor. Nayak had opposed the appointment of Shikha Sharma (Sharma), the then Chief Executive Officer (CEO) and managing director (MD), ICICI Prudential Life Insurance Company Ltd.4 (ICICI Prudential), as the CEO and MD of Axis Bank.

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1] George Smith Alexander, "People Who Built Bank Should Lead it," http://economictimes.indiatimes.com,April 22, 2009.
2] Sucheta Dalal, "A Fairy-tale Career Goes Off-Axis," www.suchetadala.com, May 6, 2009.
3] On July 30, 2007, UTI Bank officially changed its name to Axis Bank since it was allowed to use the 'UTI' brand name for free only till January 31, 2008. After this date, it had to pay royalty for use of the name. The rebranding also gave the bank an opportunity to have its own brand.
4] ICICI Prudential Life Insurance Company is a joint venture between India's largest private sector financial services company, ICICI Bank and UK-based financial services group, Prudential plc. The insurance company began its operations in December 2000 for providing financial solutions to the customers (Source: www.iciciprulife.com).

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