Emami is showing the way forward for all family-run businesses! Even the Ambani’s can learn from it

Emami group, Kolkata-based conglomerate ranging from FMCG products to real estate and healthcare are now setting up a family advisory board . The intent is to make younger generation of the two unrelated families of RS Agarwal and RS Goenka participate in the business.
As per a news report by The Economic Times, the professionals heading various departments who don’t belong to the family would report to the advisory board. Agarwal’s children Aditya Agarwal, Harsh Agarwal and Priti Surekha, and Mohan Goenka, Manish Goenka and Prashant Goenka of the Goenka family have already formed the board.

Talking to the ET, RS Agarwal, joint chairman of the Emami group said, the group will also hire US-based The Family Business Consulting Group to help in this process.

Harsh Agarwal and Mohan Goenka were seen as the front runners in the family to formally lead the flagship FMCG business which has been aggressively acquiring brands and companies. "Both families have equal crossholdings across various group companies and will seek advice from experts to chart out a robust plan," RS Agarwal told ET.

"We have ensured that the next generation in the family shares a close relationship similar to mine and Mr Goenka's and all of them are not different from each other in their values, mindsets and approach to business." All businesses of the Emami group have one member from each family on board as a director. Emami group watchers said it will be a challenging task for the promoters to chalk out a clear succession plan without ruffling feathers in the family.

"Fortunately for the group, there are no different voices in the family and they are similar in nature although they are from two different families," Anand Rathi, founder chairman of Anand Rathi Securities, a financial services firm, who has known the Emami founders since the inception of the group told the financial daily.

The promoters have trained the second generation to have a unified approach, said Rathi. "So while the daily operations are handled by non-family professionals, the family has worked along with them smoothly, with each of them playing to their respective strengths," he said.

The challenge for most family owned businesses, as Rathi told the ET, is to coordinate a structure that has professional managers hired from outside and equally capable family youngsters with formal education and ambitions.

The founders are now focused on ensuring that the next generation works together without conflicts, just as they did."There is a formal code of conduct laid down for all members of the family," said Agarwal to the ET.

"Succession planning is an area we are looking at very carefully and seriously, and taking a lot of advice from experts to ensure unanimity in the family and working together to achieve business goals,” added Agarwal.

The formal code of conduct includes dos and don'ts such as no personal loan for any family member, no stock market speculation on part of anybody in the family and restriction on the number of holidays allowed in a year.

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