Another path breaking move was to separate ownership and control or family wealth from business wealth. The family corpus is held in an investment company called GMR Holding Pvt Ltd. The entire family holding will be distributed among four non-voting trusts that have been created for four branches of GMR’s family. The beneficiaries of these trusts will have economic benefit but no voting power. A separate voting trust has been created, where one representative from each of the non-voting trusts will take all business decisions. The voting trust will have power but no economic benefit.

On the succession front, G M Rao has decided that he will step down when he is around 70, giving him approximately 14 years more at the helm. The three (next generation) successors will decide who will be the next chairman and if they disagree a ‘dead lock trustee’ has been named with appropriate power to resolve the issue.

Family members who enter the business will be taken on merit and paid on par with other professionals employed by the organisation. The economic benefits arising out of their shareholding will be separate. The family has agreed to follow all corporate governance practices and professionalise operations so that the family members can move from running operations to strategic planning.

Interestingly, the GMR group has created a Family Council that meets regularly to ensure effective and continuous communication on all business issues to ensure that everybody “speaks with one voice”. The Council meets regularly and formally and records minutes of the meetings.

... contd.