Differences between corporates are brought out clearly in addresses by their chairpersons to shareholders. Hindustan Unilever and ITC interestingly had their AGMs this year on the same day, 26th July. Similarity begins and ends there.
One was held in Mumbai and the other at Kolkata (ofcourse, you may blame the legal requirement that AGM should be held where Registered Offices are located for this West-East polarisation). HUL has no tag line adorning its logo. ITC's tag line is "Enduring Value". 'Enduring' is an over-used word in corporate vision / mission statements and logo tag lines. Apart from long-lasting, 'enduring' also means tolerating. 'Tolerating Value' obviously gives an unintended, pejorative meaning.
Press release of ITC Chairman's address carries Y C Deveshwar's picture. HUL's culture is too anonymous to permit Harish Manwani's picture in the release.
Manwani conveys precious little about company's operating performance (one may ask what is there to talk about?). This is probably because he is a non-executive Chairman unlike Deveshwar who is firmly in the saddle as an executive Chairman. He waxes eloquent on 'VUCA' (a military acronym for Volatility, Uncertainty, Complexity and Ambiguity) and also talks about the megatrends which in his view are digitisation, rise of the developing world and sustainability. Old hat, perhaps. HUL's new business model 'looks beyond shareholder value towards creating shared value'. One hopes this does not mean sacrificing minority shareholders' value to sustain value for Unilever. Deveshwar's address hints at this. Manwani argues that growth has to be responsible apart from being consistent, competitive and profitable.
What is the winning strategy in a VUCA world? Foresight and agility, Consumer centricity, Local thinking and Global acts (reversing the hackneyed paradigm 'think global, act local') and Attraction of great talent will do the trick. Is business so simple? 'Lifebuoy' soap is a constant refrain in every year's address as far as one remembers. Manwani also says, "Lifebuoy is more than a bar of soap". Yes, it is also literally a lifebuoy for HUL.
Vijay Govindarajan and Chris Trimble convincingly argue that it is time for corporates to look beyond glocalisation and invest in Reverse Innovation. Manwani could have referred to this.
"Values-led " and "Purpose-driven" leadership also is a recurring theme for HUL. Manwani justifiably takes pride in the company's brands being agents at the forefront of social change. Manwani finally assures (warns?) that "at Unilever and at HUL, we have a clear point of view about where we need to go and how to get there". One hopes that HUL and its minority shareholders will not be forced to forgo their interests in favour of Unilever. Companies are apt to misuse the royalty payments tool.
Deveshwar straightaway talks about ITC's continued robust growth. The company's triple bottom line (financial, social and environmental) performance is stressed at great length. ITC has been water positive for 11 consecutive years, carbon positive for 8 and solid waste recycling positive for 6 years. Harvard Business Review named YCD as the 7th best performing CEO in the world in early 2013.
Deveshwar leverages India's unsustainable Current Account Deficit to go hammer and tongs at royalty payments made to foreign companies. He advocates larger creation of intellectual property within the country. A typical motherhood statement nobody can contest. He bemoans the vice-like grip of foreign brands in Indian market. He makes a legitimate claim that ITC aspires to build world-class brands in India. "India is perhaps the only country in the developing world where domestic world-class cigarette brands (nurtured by ITC) have been able to outclass any foreign brand by a long margin."
ITC chairman has cleverly points out that royalty payments to foreign companies may be misused to reduce tax payments to Indian government. He is logical in pleading for similar tax deductions for domestic companies which are developing their own brands.
Deveshwar concludes by thanking the shareholders, a courtesy that Manwani is too professional to uphold!
No comments:
Post a Comment