Proprietor and partners or captain and team members?

My friend and colleague Balwinder Singh has authored a very stimulating article in LinkedIn titled “Proprietor and partners of progress – a view in corporate world”. He has very deftly used the connotation of proprietor for the corporate CEO responsible for running the show and that of partners for the workforce.

In the past, we were quite used to hearing the words “Lala’s company” for companies/ businesses run by promoters themselves doubling up as the CEO. Here as the promoter had his own money invested in the venture, he preferred centralisation of decision making, with others merely executing the strategy. Although, the companies promoted by such promoters were at times very large with multiple units and products, they still remained Lala companies.

However, as times changed and things became more competitive, these family run companies felt the need to professionalise. While retaining the financial control, several next generation family members felt the need to bring in professionals in key positions, including CEO, CFO and CCO. As these professionals desired to run the company in their own way, free hand was given to them.

The above mentioned professionals such as Pawan Goenka of M&M, Salil Parekh of Infosys, CP Gurnani of Tech Mahindra, Abid Neemuchwala of WIPRO or for that matter N Chandrasekaran of TATA are all powerful non-promoters who call shots in their respective organisations, but still cannot be called Proprietors in the sense used in Balwinder’s article. Even for that matter institutionally and widely held companies that have very strong professionals CEOs , cannot claim that these are like proprietors for a very strong oversight on them by their own boards and regulator.

Payouts to CEOs, especially in terms of the multiple of mean salary within the organisation, has been a matter debated since long, but ultimately in a free market, everything gets rightly priced by the dynamic market forces.

This blog is not a contrarian view of Balwinder’s brilliant article; it just tries to play devil’s advocate to explore other aspect of why even the most powerful professional CEOs may still fall short of being a ” Proprietor” in the sense used by my friend or in the parlance of “Lala companies” mostly of yore!

What companies probably need is a leader who is visionary, strategist, go getter, aggressive, hands on, progressive, ambition, expansionist, large hearted and compassionate ! At what price such a CEO comes then becomes immaterial and workforce feels inspired to give its best under such a leader!