Consumer goods maker Hindustan Unilever Ltd (HUL) is overhauling the skillset of its top-level board of directors to keep pace with changing times and cater to consumer demands.
The board of directors of India's largest consumer packaged goods company will now have to take a detailed look at topics such as cybersecurity, ESG (environmental, social and governance) and data governance that will impact the company's future growth and ability to retain talent.
“Over the past few years, the external environment in which we operate and the regulatory framework governing it have undergone significant changes. With increased focus on cybersecurity, artificial intelligence, environmental, social and governance (ESG) aspects and risk management, the skills and competencies required of directors in the business context for the board to function effectively have also evolved,” the company said in its 2023-2024 annual report.
Read also: HUL: Is another weak quarter causing investors to panic?
“In light of the above, the Board of Directors, based on the recommendations of the Nomination and Remuneration Committee, has approved and adopted the revised Board Skills Matrix of the Company on 26th February 2024,” the report added.
HUL will be one of the first large corporates to formally adopt additional skill sets that board members should possess. While some key skill sets have been defined earlier as essential for board members, this is the first time that HUL will be measuring the extent of these skill sets that its directors possess.
Skill Set Statistics
As per the skillset statistics shared in the report, HUL found that while 92% of the board had leadership experience, only 33% knew the ins and outs of cybersecurity, data governance and information technology.While the entire board recognised the need for and had the skills for a “purposeful business”, 75% had “experience overseeing large, complex business operations that require proven management and executive skills”.
The company's board of directors currently comprises Nitin Paranjape, Rohit Jawa, Leo Puri, Kalpana Morparia, Tarun Bajaj and Neelam Dhawan.
Read also: How HUL's Rohit Jawa plans to beat India's clock speed
HUL has over 50 brands across 16 FMCG categories. Its FY24 sales were ₹59,579 crores.The governance structure of this consumer company is multi-tiered and comprises of a Board of Directors, a Board Committee, a CEO and MD and an Executive Committee.
In April, the company announced the appointment of BP Biddappa as Executive Director, Human Resources and Chief People, Transformation and Sustainability Officer, South Asia on the HUL Executive Committee. Biddappa's role will be to lead the talent agenda for South Asia and drive transformation interventions from a business, organizational and sustainability perspective.
change
The change comes at a time when India has become a key global market for Unilever and Indian talent has become more visible within the company – in fact, HUL has been dubbed a “CEO factory” and has produced CEOs, CXOs and other executives who now hold top leadership positions in companies around the world.
Meanwhile, recruitment firms are searching for independent directors who are familiar with the changing needs of business, with more than 1,000 independent directors expected to retire by June 2024. The vacancies have left companies across all industries scrambling to find replacement managing directors and CEOs.
“Director selection has become very specific. For example, clients are looking for directors who understand sustainability, digital-first business, etc. Earlier it was 'find us a director' but now the criteria for shortlisting candidates has changed,” said K Sudarahan, Asia chairman at recruitment firm EMA Partners India.
“Companies want board members who don't necessarily have experience working in new-age businesses or have exposure to ESG or AI, but are aware enough to have an opinion on the impact on the business. Quality of rank and experience is crucial, but a good understanding of current trends and practices is crucial,” Sudarshan added.
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