Bringing gen-next to the board? LIC is watching

livemint.com:

BENGALURU : Founders of public companies naming their scions as senior executives or board members may find the going harder as the passing of baton comes under greater scrutiny from the world’s biggest public money managers, including Life Insurance Corp. of India (LIC), the country’s largest domestic institutional investor. LIC expressed its unhappiness over 12 proposals pertaining to the appointment or reappointment of the next generation of founders in 11 promoter-led firms between January 2022 and 30 September 2023, according to a Mint review of LIC data on voting records.

Despite its strong observations, though, LIC, which manages ₹47,43,389 crore ($569.3 billion) of assets, did not reject all but one resolution, thereby saving the promoters from embarrassment. For this reason, all 12 proposals secured majority approval. Take, for example, LIC’s observations on the resolution seeking the reappointment of Sagar Adani at Adani Green Energy Ltd.

Sagar Adani is the nephew of group founder and chairman Gautam Adani. “With less than 10 years of post-qualification work experience, his experience is not enough to be an executive director on the board of a listed company," LIC reasoned when the proposal was put before shareholders to vote in July. “Remuneration not capped," LIC noted, even though it eventually decided not to vote on the proposal.

Twenty-two per cent of large investors voted against Sagar Adani’s re-appointment, according to voting records published on BSE. But a 56.26% promoter holding and the abstention of LIC, which owns 1.36% of the company, helped the resolution sail through with a 96% vote in favour. Similarly, LIC made a rare rebuke on the reappointment of P.