HUL separates Chairman and MD posts; brings back Nitin Paranjpe

The country’s leading fast moving consumer goods (FMCG) major Hindustan Unilever (HUL) on Thursday said that it is all set to segregate the posts of chairman and managing director (MD) from March 31, 2022.

The Mumbai-headquartered firm will have Nitin Paranjpe as its non-executive chairman while the current chairman and MD Sanjiv Mehta will continue to lead the executive roles as its chief executive officer and MD.

“In consonance with the emerging, progressive governance trends, HUL today announced the separation of the position of Chairman of the board and the CEO and Managing Director,” the company said in a statement. Welcoming Paranjpe back to the company, Mehta said that his huge knowledge and experience “will enrich the deliberations and add value to the (HUL) board”.

Paranjpe, who was recently appointed as the Chief Operating Officer at HUL’s parent Unilever, is an HUL veteran and has been at the helm of its affairs as the CEO before Mehta took charge in 2013.

HUL’s move comes nearly a week after the stock market regulator – Securities and Exchange Board of India (SEBI) – made separation of the posts of chairman and MD/CEO voluntary for top 500 listed entities. Earlier, it had set a deadline of 1st April, 2022 for the separation of these roles to become a binding on the India Inc.

“Considering rather unsatisfactory level of compliance achieved so far with respect to this corporate governance reform, various representations received, constraints posed by the prevailing pandemic situation, and with a view to enabling the companies to plan for a smoother transition, as a way forward, the SEBI board at this juncture has decided that this provision may not be retained as a mandatory requirement and instead be made applicable to the listed entities on a voluntary basis,” it said in a statement last week.

Last year, after the regulator came up with the guidelines that required the chairperson of the board of top 500 listed entities be a non-executive director and not related to the MD or CEO, industry leader Anand Mahindra stepped down from his executive role at Mahindra & Mahindra (M&M). In November, he became a non-executive chairman of M&M. He, however, continues to hold the post of executive chairman at the Mahindra Group.

Currently, leading companies like Reliance Industries (RIL), ITC, Nestle India and Adani Ports and SEZ have one individual holding both the posts of executive chairman and MD/CEO. While at RIL, billionaire Mukesh Ambani serves as its CMD, at ITC Sanjiv Puri, at Nestle India its Suresh Narayanan and at Adani Ports mogul Gautam Adani holds fort.