Ratan Tata and Subir Gokarn

Ratan Tata and Subir Gokarn

There is an underlying common theme between the succession plan of a corporate patriarch and the appointment of a senior central banker.

Ratan Tata said on Wednesday that the next chief of the Tata group could be a foreigner. On the same day, the government finally cleared the appointment of Subir Gokarn as the deputy governor of the Reserve Bank of India (RBI).

Both these events point in the same direction: the readiness to pull in the best talent from outside the normal boundaries set up by the two organizations. The Tata group has always been run by an Indian and almost inevitably by a Tata in its 140-plus years of existence. RBI, too, has mostly reserved its top jobs for people within a charmed circle of central bank insiders or civil servants. Among the few exceptions: R.K. Hazari came to RBI via Bombay University and the Economic and Political Weekly while C. Rangarajan came in from the Indian Institute of Management, Ahmedabad.

There is a lesson here for the rest of the Indian government and corporate sector. Top jobs in companies are still reserved for family scions while it is difficult to get a senior position in government unless you have climbed the civil service ladder. There have been notable exceptions, but the general trend has not been very inspiring.

India has changed. Large corporate groups have gone global, in the scope of their operations as well as the funding of their balance sheets. Governance, too, requires special expertise that does not necessarily lie within the generalist administrative services that were designed to serve a colonial state.

The change to a culture of global talent searches in the case of companies and lateral entries in the case of the civil services is not going to be easy or rapid. Just think back at the shock in Japan when Carlos Ghosn, a Frenchman of Lebanese origin, was appointed head of Japanese car maker Nissan in 1999. He has now been honoured by a Japanese manga comic book on his life.

Civil services in most nations tend to be closed shops that bristle at any suggestion that outsiders should be brought in from time to time.

Have we just seen the first signs of change?

Do Indian organizations have to spread the talent net wider? Tell us at views@livemint.com