Succession plan: Shriram Group forms its board of directors

The founder and patriarch of the R Thyagarajan group will now be the mentor of the board of directors.

Putting a succession plan in place, the Chennai-headquartered Shriram Group, the financial services giant that covers the businesses of retail lending, truck finance, housing finance, life insurance, d general insurance and wealth management, announced Tuesday the formation of a board of directors to steer the long-term vision and strategy of the group.

Moving away from a formal role, the founder and patriarch of the R Thyagarajan group will now be the mentor of the board of directors, with the new management in place. The promotion of the Shriram Group has already been transferred to the Shriram Ownership Trust (SOT) which owns a stake in Shriram Capital which, in turn, is the holding company of other companies in the group.

The board of directors appointed by the SOT includes DV Ravi, MD, Shriram Capital; R Duruvasan, full-time director, Shriram Capital; Umesh Revankar, Non-Executive Director, Shriram Capital and VC & MD, Shriram Transport Finance Company; and Jasmit Singh Gujral, Non-Executive Director, Shriram Capital and Executive VC for Shriram General Insurance Company.

In recent years, the Shriram group’s succession plan has sparked apprehension, especially after the exit of the Piramal group in 2019. Explaining the transition, Thyagarajan said, “The growth of the Shriram group must be attributed to the strong team. direction, which has evolved over time. The group began its foray to a small extent through chit fund operations and gradually expanded its business across the financial services and insurance spectrum. The management team, made up of senior executives from the various group entities, has played a decisive role in the development of the companies up to their current level of growth and profitability.

He said that in recent years there have been apprehensions about the succession planning of the Shriram Group. “Although I have indicated that the succession has been transferred to SOT in various forums, more information is expected on this transition. Internally, we have made it clear that the promoters’ stake in the Shriram Group will belong to its current and future leaders who will be the best stewards of Shriram’s future growth. The SOT was formed in 2006 with this objective.

The board of directors will be responsible for defining the long-term strategy of the individual entities and the group and overseeing its execution. The members of the board of directors will manage the essential areas which have an impact on the group across the entities and are not necessarily aligned with a particular entity. They will collaborate with each other in a way that will get the best out of the group.

“In my various interactions, I have repeated that an individual cannot manage a large group like ours. It requires a diverse set of individuals who can collaborate to drive the group’s vision and strategy. In accordance with my belief, a management team that will oversee the interest of SOT, as the promoter of the Shriram group, has been formed, ”Thyagarajan said.

Over the years, the Shriram Group has kept “the common man” at the center of all of its business decisions. He has always excelled in serving the underserved and focused on prosperity at the bottom of the pyramid, the needs of which have so far not been fully met by actors in the organized financial sector. Through its credit activities, the group ensures that more than 95% of the loans granted are channeled towards meeting the financial needs of this segment in the country. Shriram Transport Finance Company specializes in providing credit to commercial vehicle drivers who wish to own a vehicle. Likewise, at Shriram City Union Finance, most of the funded two-wheelers are intended to support the livelihoods of the self-employed segment. The MSME activity in Shriram City has been rightly referred to as “small business finance”, in line with the business ethic of serving the common man.

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