A Model Split

The 127-year-old conglomerate shows how to walk the talk on transferring the baton - and the legacy - without the succession drama

- Ayaan Kartik

Scan the history of Indian corporates and the theme of family drama over wealth turns out to be a constant.

Starting from the feuds of the Modi and Shri Ram families to the more recent disputes of the Bajaj and Ambani families, there are a number of examples of how and where things went wrong for business scions. So, the announcement of the Godrej family in April this year came as a pleasant surprise to many.

In a joint statement, the family announced that they had agreed to split the group into two divisions to better align the different visions of its members. On one side were Adi and Nadir Godrej, and on the other, Jamshyd Godrej and Smita Crishna.

While the peaceful resolution of longstanding issues came as a relief to investors and observers of the 127-year-old conglomerate, it was also a wise move at a time when the Indian economy was growing at a steady pace, presenting the conglomerate with several opportunities for expansion.

The detailed settlement not only broke from the trend of feuding over a share of the business, it also set a precedent for family businesses across the country and globally.

All in the Family

That a family dispute can hurt its business has been well documented. Estimates show that only 13% of family businesses survive till the third generation while only 4% go beyond the third generation. Seen in this context, the settlement agreement of the Godrej family is an impressive feat.