Indian Chamber of Commerce Hosts 95th Annual General Meeting with Emphasis on Family Business & Transition

Indian Chamber of Commerce Hosts 95th Annual General Meeting with Emphasis on Family Business & TransitionKolkata, 1st November 2023: The Indian Chamber of Commerce convened its 95th Annual General Meeting on Tuesday, October 31, 2023, at the Taj Bengal, Kolkata. The event commenced with discussions centered around the theme of Family Business & Transition. Distinguished speakers, including notable figures like Mr. H M Bangur, Chairman, Shree Cement Ltd.; Mr. Harshavardhan Neotia, Chairman, Ambuja Neotia Group; Mr. Gaurav Swarup, Co-Chairman & Managing Director, Paharpur Cooling Towers Ltd.; Mr. Rudra Chatterjee, Managing Director, Luxmi Tea Pvt. Ltd., and Chairman, Obeetee Ltd.; Mr. Pranav Sayta, Partner & National Leader, International Tax & Transaction Services, Ernst & Young LLP; Mr. Mehul Mohanka, President, Indian Chamber of Commerce; Mr. Ameya Prabhu, Senior Vice President of the Indian Chamber of Commerce; and Mr. Abhyuday Jindal, Vice President, Indian Chamber of Commerce., graced this prestigious gathering. The event featured a stellar lineup of participants, making it a momentous occasion for the Indian Chamber of Commerce. The event also featured an exclusive session on sports, entertainment, mental health, career journeys and the importance of women empowerment with PV Sindhu, Padma Bhushan & Arjuna Awardee, Badminton World Champion and Sanya Malhotra, Renowned Actress & Influencer. The evening culminated with a grand musical performance by the renowned musicians Sourendro & Soumyojit.

While delivering the welcome address, Mr. Mehul Mohanka, President, Indian Chamber of Commerce, stated, “We recognize the vital role of family businesses in enhancing India’s GDP and underscore the significance of their sustainability, along with the advantages of commencing them at an early stage. We are proud of the diverse domestic and global initiatives undertaken by the ICC, spanning various sectors and fostering partnerships for shared prosperity. Additionally, we address resolutions related to committee reports and auditors’ appointments. We extend our gratitude to various stakeholders, including government officials, partners, and fellow chamber members. We acknowledge the invaluable support received during my tenure as the speaker and the collaborative efforts within the ICC.”

As the moderator, Mr. Pranav Satya, Partner & National Leader, International Tax & Transaction Services, Ernst & Young LLP, requested the distinguished guests to share insights and their perspectives on several crucial points concerning the landscape of family businesses in India. These included the substantial presence of family businesses in India, constituting nearly 80 percent of the country’s enterprises and playing a vital role in its GDP; the robust entrepreneurial culture in India, characterized by a deep-rooted entrepreneurial spirit, particularly evident in the prevalence of MSMEs; the evolving dynamics of the Indian economy, which is experiencing a notable shift towards formalization as businesses strive to compete on a global scale; family businesses were highlighted as well-suited for this transformation and their inherent focus on long-term perspectives; non-family companies fixated on short-term quarterly gains, family businesses prioritize long-term advantages, often with the goal of creating a lasting legacy for future generations; the long-term mindset is deeply ingrained, especially when the current management intends to pass on the business; the challenges in transitioning family businesses beyond the third generation; and despite their many advantages, only a mere 3 percent of family businesses successfully endure into the fourth generation, making this a formidable challenge that warrants further exploration and understanding.

Mr. H M Bangur, Chairman, Shree Cement Ltd., stated, “In India, the notion of exiting a business remains somewhat taboo. The decision on what is truly in the best interest of the next generation should ultimately rest with them. By the time the third generation takes the helm, various factors tend to dilute the original vision. However, by adhering to family values and maintaining personal integrity, one can steer the course effectively.

Mr. Harshavardhan Neotia, Chairman, Ambuja Neotia Group, said, “The complexity of managing family businesses and the importance of balancing unity and continuity within the family while allowing individual members the freedom to pursue their interests. It emphasizes the need to distinguish between management and ownership and encourages individuals to follow their genuine interests rather than being forced into roles that do not align with their passions. The role of elders in guiding and shaping the family business, especially in situations where family members have varying levels of competence or interest. It acknowledges the challenges in businesses where the family holds partial shares and the responsibility towards shareholders at large. Flexibility is considered essential, with a recognition that children may take time to discover their true interests. The possibility of a partial exit from the family business to pursue other ventures is mentioned, and the importance of open-mindedness and adaptability is stressed. Concluding by underlining the need to address complexities and challenges openly to prevent undue suffering and conflicts within the family.”

Mr. Gaurav Swarup, Co-chair and Managing Director of Paharpur Cooling Towers Ltd., emphasized, “To truly excel, it’s essential to surround yourself with intelligent individuals and glean knowledge from them. Need to avoid the notion that I can handle everything single-handedly. This is a crucial quality one must possess when entering the business arena. In a competitive business landscape where competence is key, aspiring entrepreneurs should aspire to be wealth creators; otherwise, they should reassess their position.”

Mr. Rudra Chatterjee, Managing Director, Luxmi Tea Pvt. Ltd. and Chairman, Obeetee Ltd., emphasized the importance of distinguishing between ownership and management within a family-run business. He stated, “In a family setting, it is crucial to be willing to shoulder individual risks. Furthermore, it’s essential to recognize that employees value more than just their salaries and must adapt to the evolving needs of the business. Some aspects of the business require professionalization to prevent potential setbacks under family management. In such cases, involving professionals becomes crucial to ensure employees receive more than just monetary compensation. The business landscape can change, and the skills required may vary over time. You may be the right fit for the business today, but the business’s demands might evolve. It is incumbent upon family members to prepare for these changes. Moreover, once the business attains a certain size, professionals can step in. However, the decision to run the business with family members or professionals ultimately depends on individual preferences.”

Ms. Devina Swarup, Director, Paharpur 3P Pvt. Ltd., stated, “The personal experience reflects the influence of their upbringing in a large joint family on their values and approach to life. They emphasize the importance of values like honesty, simplicity, achievement, excellence, knowledge, and humility, which were instilled in them from a young age. Family meals, punctuality, and the role of grandparents played a significant part in shaping these values. The continuity of their family business to the third generation is attributed to the harmony and shared values cultivated in their upbringing. The speaker’s attitude towards spending is influenced by their family’s values, and they emphasize that these values are irreplaceable. The idea of retirement is viewed through the lens of individual choice, with the belief that knowledge and experience from older generations are valuable assets to be retained. The importance of open and transparent communication when transitioning from one generation to the next in a family business, highlighting the need for collaboration and dialogue between older and younger generations to ensure a successful transition.”

While addressing virtually, Mr. Abhyuday Jindal, Vice President, Indian Chamber of Commerce, expressed, “It is imperative to have a singular decision-maker, with different family members assuming responsibility for the management of distinct verticals. The presence of unified leadership is paramount.”

While delivering the vote of thanks, Mr. Ameya Prabhu, Senior Vice President, Indian Chamber of Commerce, articulated, “Acknowledging the active and effective leadership within the ICC, and recognizing the organization’s substantial growth and expanding global reach, I underscore the significant contribution of family businesses to the Indian GDP. This highlights the deep-seated entrepreneurial spirit embedded in Indian culture and the enduring perspective of family businesses. Notwithstanding these strengths, family businesses encounter formidable challenges when it comes to transitioning beyond the third generation, with only a small percentage managing to survive into the fourth generation. To address this challenge, we place emphasis on the vital task of rekindling the entrepreneurial spirit and continually creating opportunities for growth. The paramount objective is to preserve value, understanding that wealth can be fleeting but can be retained through a steadfast commitment to value preservation.”