In a long-awaited top management succession planning exercise, corporate giant Larsen and Toubro on Friday appointed K Venkataramanan as CEO and managing director, while its current chief A M Naik would remain executive chairman for the next five years.
Naik currently holds the position of Chairman and MD at the group, a major player in engineering, manufacturing, construction and a host of other businesses including technology and financial services.
The L&T's board of directors has decided to bifurcate the roles of Chairman and Managing Director in a major top management rejig, which would become effective from April 1.
As per the new structure, Venkataramanan would assume the position of Chief Executive Officer and MD, while Naik would assume the post of executive chairman.
Krishnamurthi Venkataramanan is currently Whole-time Director and President (Hydrocarbon) and had joined L&T as a Graduate Engineer Trainee in 1969. He was elevated to L&T Board in the year 1995.
"I am pleased that the board has appointed K Venkataraman as CEO & MD. I have full confidence that under Venkataramanan's leadership, L&T will continue on its growth path," Naik said.
While Venkataramanan would be responsible for the businesses of L&T, Naik would focus on completing the portfolio restructuring, institutionalising the IC (Independent Company) structure, mentoring and developing the leadership team and future leaders, the group said.
Naik, a towering corporate leader of the country, had joined L&T as a Junior Engineer in 1965 and rapidly rose to senior positions -- moving from general manager to managing director and CEO, culminating in his appointment as chairman in December 2003.
L&T said it has undertaken an exercise, named 'Lakshya', to simplify its portfolio and has created 10 independent companies and seven subsidiaries in order to bring focus, autonomy and accountability. It had also engaged services of global strategy firms for the same.
However, changes in the economic environment has led to L&T undertaking a mid-term review of strategic plan, which is now under finalisation, it said in a statement after today's board meeting.
"In line with the vision of the company to become an Indian Multinational as also looking at the current global competitive environment, it needs to develop leaders who will manage the company, going forward," it added.
Accordingly, the board decided that there was a need for continuity and requested Naik to continue for a period of five years as Executive Chairman of the Group.
"I am honoured with the responsibility that the board has placed on me. I am also happy that A M Naik's guidance will continue to be available," Venkataramanan said.
The company said its board was confident that its decision was in the best interest of all stakeholders.
L&T shares rose 4.7 per cent to Rs 1,294.75 in early morning trade. Shares of another group company -- L&T Finance Holdings -- was trading 2.34 per cent up at Rs 48.05 at the BSE.
Image: K Venkataramanan