It’s time an institute of management education started a course on managing family-based political parties. Family business management is a discipline that has evolved from an art into a science. The market for this line of education has been created by the growing recognition of family-run companies that shareholders are demanding greater clarity on issues ranging from succession to the management of wealth and the distribution of profits.
Soon, voters too will demand such clarity in the functioning of family-run political parties, given the proliferation of such entities and the universal failure of political patriarchs to manage their families and, as a consequence, their parties.
There is now a wealth of literature on managing family businesses and the more progressive, forward-looking business leaders have even created Family Constitutions and Family Councils. Samajwadi Party leader Mulayam Singh Yadav should have enrolled himself for one of those courses before things came to the current pass in his many-membered political family.
The political family quarrels of our times remind us of the business family battles of the past. They are driven as much by ego and competing agendas as they are by the fight for the division of wealth and spoils. The collection of funds for political purposes within family-based political parties is only the visible source of income for members of political families. In more recent times, family-based political parties have acquired millions of dollars of assets in India and abroad and this has raised the stakes.
Consider the experience of six political families and how they have handled legacy issues. Indira Gandhi was the first Indian politician to internalise within the family the issue of leadership succession within a political party. She was not particularly adroit in doing so. When she opted for her son, Sanjay Gandhi, she never imagined that upon his death his widow, Maneka, would want to inherit the mantle. Like a good patriarch she chose another son over the daughter-in-law, causing the first such rift within a family created by political choices. Interestingly, Indira’s daughter-in-law, Sonia, has also opted for patriarchy over performance, choosing a politically uninclined son over a politically savvy daughter.
The more dramatic family quarrels have, however, been within regional parties. Telugu Desam supremo, N.T. Rama Rao, tried to impose his second wife on his party and was worsted by his rebellious son-in-law, Nara Chandrababu Naidu, who took the party away from him and his family rivals. His daughter and another son-in-law lost out to the smarter Naidu, who is now trying to impose his son on his party. In Chennai, the many children of DMK leader K. Karunanidhi, from his many wives, have been fighting for some time now and the politics of that state will be shaped by how those family battles play out once he is gone. The quarrel among the inheritors of Shiv Sena boss Bal Thackeray continues to plague the state and the metropolis with disastrous consequences for the country as a whole, as we have seen this past week.
While the founder-leader of the BSP, Kanshi Ram, made it obvious in his lifetime that his loyalist, Mayawati, would inherit the mantle from him, the AIADMK founder, M.G. Ramachandran, left a messy legacy with his wife and his partner, J. Jayalalithaa fighting out the succession battle. In Telangana, there is already speculation as to whether party founder K. Chandrashekhar Rao would be succeeded by his talented and urbane son, K.T. Rama Rao, or the party’s organisation man, his nephew T. Harish Rao.
Back in the 1980s and even into the 1990s, the business media was full of stories about business family wars — father-son battles, sibling rivalry and the Mahabharata-like quarrels between first wife and second wife and mistress and so on. Some of the biggest and oldest business families featured prominently in the news stories of the times. The Birlas, the Shrirams, the Modis were among the more prominent, while business empire division and managerial control issues impacted almost every prominent business family. The last and the most celebrated business family quarrel was the one between the sons of Dhirubhai Ambani.
Living through this and suddenly experiencing unplanned and rapid expansion of his business, the chairman of the GMR Group, G.M. Rao, chose to write a family constitution and create a family council. Rao’s objective was that the inheritors of his business empire would not dissolve it through divisive battles. As he told a business magazine, “to achieve 100 per cent corporate governance, family governance is needed.”
The more progressive business families are now following the GMR example of drawing up family constitutions and charters, setting up family councils and informing shareholders as to what their succession plan is. Businessman Analjit Singh, who was himself at the receiving end of a celebrated family dispute, recently spoke to an Indian Business School audience on the need for “mindfulness” in managing family issues in the larger interests of shareholders.
It is an idea that the heads of family-based political parties must internalise not just to keep the family together, but, and more importantly, to ensure good political management. In a report on managing family business, consultancy organisation McKinsey has enunciated five principles: (a) ensure harmonious relations within the family and an understanding of how it should be involved with the business; (b) create an ownership structure that provides sufficient capital for growth while allowing the family to control key parts of the business; (c) ensure strong governance of the company and a dynamic business portfolio; (d) opt for professional management of the family’s wealth; and (e) create charitable foundations that promote family values across generations.
The voter’s right to know how a political party she has voted for will manage leadership transition is even more important than a shareholder’s right to know how her investment will be managed by a family in transition. In a democracy, should voters not be demanding greater “mindfulness” on the part of political leaders in the handling of family issues?