Axis Bank succession planning fiasco
Axis Bank: The Succession Planning Fiasco
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Student, Delhi Institute of Advanced Studies
This case discuss the issue at Axis Bank Ltd.(Axis Bank), India’s third largest private sector bank. The Axis Bank was under Pangal Jayendra Nayak (Nayak) the CMD of the bank from January 1, 2000 to April 20, 2009. Analysts credited him with taking the bank to a new level during his tenure. However, Nayak also attracted criticism for his failure to identify and groom an able successor to lead the bank after the end of his tenure. In early 2009, the board of the Axis Bank initiated the succession planning process and hired a global HR firm, to identify Egon Zehnder International to identify the new CEO. After many months of scouting and intense media speculation about Nayak’s successor, the Axis Bank board zeroed in upon Shikha Sharma (Sharma), the then CEO and chairman of ICICI Prudential Life Insurance Company Ltd., as the new CEO and MD of Axis Bank.
On April 20, 2009, Pangal Jayendra Nayak (Nayak), the then chairman and managing director (CMD) of Axis Bank Ltd., 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) as the CEO and MD of Axis Bank.The decision was opposed by Nayak as he reportedly wanted an insider to succeed him. He favoured an insider for the post, and was backing Hemant Kaul, who heads the Axis Bank 's retail operations.
"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."
- Pangal Jayendra Nayak (Nayak), ex-chairman and managing director, Axis Bank Ltd., in April 2009
According to Nayak, Sharma did not have the relevant banking experience to take up the position and because he felt that she was a career ICICI
,
Student, Delhi Institute of Advanced Studies
This case discuss the issue at Axis Bank Ltd.(Axis Bank), India’s third largest private sector bank. The Axis Bank was under Pangal Jayendra Nayak (Nayak) the CMD of the bank from January 1, 2000 to April 20, 2009. Analysts credited him with taking the bank to a new level during his tenure. However, Nayak also attracted criticism for his failure to identify and groom an able successor to lead the bank after the end of his tenure. In early 2009, the board of the Axis Bank initiated the succession planning process and hired a global HR firm, to identify Egon Zehnder International to identify the new CEO. After many months of scouting and intense media speculation about Nayak’s successor, the Axis Bank board zeroed in upon Shikha Sharma (Sharma), the then CEO and chairman of ICICI Prudential Life Insurance Company Ltd., as the new CEO and MD of Axis Bank.
On April 20, 2009, Pangal Jayendra Nayak (Nayak), the then chairman and managing director (CMD) of Axis Bank Ltd., 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) as the CEO and MD of Axis Bank.The decision was opposed by Nayak as he reportedly wanted an insider to succeed him. He favoured an insider for the post, and was backing Hemant Kaul, who heads the Axis Bank 's retail operations.
"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."
- Pangal Jayendra Nayak (Nayak), ex-chairman and managing director, Axis Bank Ltd., in April 2009
According to Nayak, Sharma did not have the relevant banking experience to take up the position and because he felt that she was a career ICICI
References: Nayak leaves behind fine records at Axis Bank. domainb.com:-http://www.domain b.com/people/in_the_news/20090421_nayak_leaves.html Shikha Sharma appointed as managing director and CEO of Axis Bank. The Economic Times:- http://articles.economictimes.indiatimes.com/2009-04-20/news/27663022_1_shikha-sharma-icici-bank-hemant-kaul Shikha Sharma Axis CEO, Pangal Jayendra Nayak quits in huff. The Economic Times:- http://articles.economictimes.indiatimes.com/2009-04-21/news/27646911_1_axis-bank-board-meeting-icici-group