Rebuilding trust
Will Chanda Kochhar be back at the helm at ICICI Bank, if the investigations conducted by Justice Srikrishna absolve her of any wrongdoing? No one is quite sure as yet. The board has not spelt out any timeframe for the investigation. But it is entirely possible that if the matter drags on till the end of the year, it would make very little sense for her to return for just three months, since her term officially ends in March 2019.
Besides, of late, RBI has spoken its mind on CEO appointments. In April this year, media reports spoke about how it had asked the Axis Bank board to reconsider its decision to extend another three-year term for Shikha Sharma. In this case, set against the backdrop of a high-pitched controversy surrounding Ms Kochhar, it is highly doubtful if the banking regulator will allow the bank's board to even consider another term for her.
Plus, the recent changes in ICICI Bank’s board composition could play a big role in how things unfold for Ms Kochhar. The earlier chairman M K Sharma was seen to be close to her and took it upon himself to give her a clean chit in March this year. The public outcry that followed may have acted as a wake-up call for Mr Sharma. So, before he stepped down on June 30, Mr Sharma may have redeemed himself by setting in motion an independent investigation-and sending Ms Kochhar on indefinite leave.
And while she is away on leave, the entry of G C Chaturvedi and at least three new faces on the board could signal that the die may be cast for Ms Kochhar. In the past few months, the damage to the bank's reputation has been immense, what with a series of whistle-blower letters, strident media commentary on the governance lapses, plummeting morale inside the bank, and the potential class action suits, not to forget the various governmental investigations.
The new chairman and retired bureaucrat Mr Chaturvedi and COO Sandeep Bakhshi have to find a way to steer the ship towards safe harbour, away from the harsh glare that the bank has been subjected to for the past few months.
The chemistry between the two will make it easier. In fact, if insiders are to be believed, the board was unable to find a suitable replacement for Mr Sharma. Many big names were tossed around, but no credible candidate was willing to take on the mantle. And it was eventually left to Mr Bakhshi to weave his magic in Delhi's bureaucratic circles. Mr Bakhshi spent much of his early years in Delhi and is said to have formidable network in the bureaucratic circles. He enjoys a longstanding relationship of trust with Chaturvedi. When Mr Bakhshi was CEO and MD at ICICI Lombard, he got to know Mr Chaturvedi, who served as a joint secretary and later as an additional secretary in the ministry of finance.
Mr Bakhshi will be mighty keen to prove that he is the right choice to head the bank. Interestingly, when CEO K V Kamath's crack team, which included Ms Kochhar, Nachiket Mor, Ms Sharma, and a few others, were being given prime roles inside the bank, Mr Bakhshi wasn’t seen as someone with a big risk appetite. It wasn't until 2007, after he had proven himself at ICICI Lombard, that his quiet, understated leadership style began to be appreciated internally.
Today, ironically, a steady hand-and a more humble leadership style-is now de rigueur at the bank. While no one doubted her competence, Ms Kochhar clearly enjoyed being in the limelight, and became somewhat obsessed about her place in the global power lists, posing for photo-ops with the PM and hobnobbing with global CEOs at Davos and other such high-profile events.
On the other hand, Mr Bakhshi's self-effacing leadership style should ensure that he stays clear of personal brand building, and focusses on rebuilding organisational trust. As a first step, Mr Bakhshi has already begun strengthening his top team at the bank. Sandeep Batra has moved in from ICICI Prudential as president of the corporate centre and will head compliance, legal, audit and communications. Pramod Rao will join shortly as the new general counsel from Citibank, in his second stint with ICICI Bank. Both men are known to speak their mind and take principled decisions.
To help matters, all the key members of Mr Bakhshi's current leadership team have directly worked with him at some point in time. He will need to insulate them from the current distractions and create the space for them to put their heads down and function effectively. And Mr Bakshi will need to personally focus on gradually rebuilding trust with key stakeholders in government, regulators, investors and media. Clearly, it will be a long slog ahead.