By Ruma Dubey
Chanda Kochhar. The name, till a few months ago, evoked a sense of new age empowerement. She symbolized the ambition of the modern women, showing us that not every organization has a glass ceiling, showing us the ‘possibility’ of what a woman can achieve.
She headed the largest private sector bank of India and today, what is left of all that reputation is ash. She worked so hard and did so much to make ICICI Bank what it is today, steered it through the difficult times of 2008. But all that people will remember her for now is that she nurtured nepotism and caused serious corporate governance issues. A small blight is all that is required and everything that she stood for, that she symbolized has come to a naught. That’s the shaky climb to fame; it takes years to get up there but one misstep and down you come crashing.
She had to go, no sympathies there. The only complaint is that it took so long for the Board to take this step. Though she has denied that her husband and brother-in-law received an alleged quid pro quo in return for loans from ICICI Bank, the dark cloud of suspicion continues to remain over her.
When this news broke out, the Board of ICICI were very quick to come to the defense of their CEO and even refuted any conflict of interest issue. The Board got pushed into a corner when a retired judge forced them to open an inquiry. Already red faced, they have now tried to salvage the situation by asking Kochhar to go on leave till the inquiry gets over. So she remains the CEO – she is on leave so she has temporaries filling in her place.
But then, one should not nurture of the fear of her returning as Kochhar’s term ends on March and it is unlikely that her term will be renewed. Thus she is gone; that seems a certainty for now. The ADRs of ICICI Bank jumped up over 5% when the news of her going on leave broke out. And that in many ways, indicates what the people want. A CEO, even if she is a celebrated one is good only as long as she does not tarnish the reputation of the very bank she serves. It’s a pity the Board did not see it this way.
The biggest fallout of this is the loss of faith on the ICICI Bank board. They chose to stand up for Kochhar, caring two hoots about the eroding shareholder value. Now that is something which the new COO, Sandeep Bakshi will have to address first. Many funds have exited the bank on corporate governance issues – will Bakshi be able to get them back? And yes, like Kochhar going on leave, the Board should also take leave – till a new Board comes in, that faith will never come back, nor will the funds.