Opinion
From Nadella to Nooyi, the discretion deficit plaguing business leadership
Summary
They often say things that make one wonder about the advice they get on public relationsThere are times when hosting a destination birthday party is a bad idea. Yet, Sanjeev Gupta, who heads the embattled international metals conglomerate Gupta Family Group Alliance, went ahead with his 50th birthday celebrations in Mykonos late last month. Flashy helicopters transported guests to the celebrations. The parties were a world away from the troubles that GFG Alliance finds itself in with more than $5 billion in outstanding debt that needs to be urgently refinanced after its main lender Greensill collapsed earlier this year. As the Financial Times reported this month, “[Gupta] has not stepped on British soil since the Serious Fraud Office opened a probe into business in his [GFG Alliance]." When the probe was announced in May, GFG said it could not comment on the probe, but said it was making progress refinancing its loans amid very strong global markets for aluminium, iron ore and steel. In early October, Swiss police raided the offices of Credit Suisse as part of an investigation into the collapse of a $10 billion fund linked to Greensill, which counted former UK prime minister David Cameron among its lobbyists.
The lavish party in Mykonos raised the question of why so many highly successful people appear to pay little heed to perceptions even when the spotlight is on them. Thousands of jobs hang in the balance at companies owned by GFG Alliance. A highly visible birthday party in a Greek resort seems indefensible in such circumstances.
India’s diaspora of business people is often held up as a symbol of pride with good reason: in the past couple of decades, no developing country has produced as many chief executive officers of Fortune 500 companies. Less commented upon is that this group also generates its share of controversy, all too often by saying the wrong thing at the wrong time. Exhibit A in this category is the former global managing director of McKinsey & Co, Rajat Gupta. He was convicted in 2012 to two years in prison on charges of insider trading and ordered to pay $5 million in fines. The ruling was upheld by a federal appeals court in the US and by the Supreme Court there. And yet, there was not much by way of repentance in the memoir he wrote of his life a couple of years ago. The US government’s case against Gupta, who was on the Goldman Sachs board, hinged on calls he made immediately after a board meeting of the investment bank to Raj Rajaratnam, a hedge-fund trader. Gupta called Rajaratnam in September 2008, soon after Goldman’s board approved an investment by Warren Buffett, a huge vote of confidence at the height of the financial crisis. Rajaratnam bought millions in Goldman stock that day. Gupta said the call he made was to inquire about an investment he had made in a fund managed by Rajaratnam. I found Gupta’s criticisms of the US justice system completely unfounded. If anything, the prison term he received arguably suggests that white-collar felony gets off too lightly.
By contrast, few in the Indian diaspora make for a more uplifting interview than former PepsiCo CEO Indra Nooyi, who is currently everywhere at once, it seems, as she promotes her book My Life in Full. Her interview with Karan Thapar on The Wire website was a delight, featuring Nooyi’s repertoire of endearing stories about her family and working at Pepsi. At one point in the interview, Nooyi even sang an old Beatles song.
Yet, in a recent interview with The New York Times (NYT), Nooyi stumbled uncharacteristically and embarrassingly. Amid a wealth of evidence that women are underpaid in corporate America and elsewhere in comparison with their male counterparts, Nooyi said she had never ever asked for a raise, saying she would find it “cringeworthy". The NYT fills its articles with contextual detail; a footnote elaborated that Nooyi had earned $31 million in her last full year as PepsiCo’s chief. Asked about draconian laws that criminalize abortion in Texas, Nooyi ducked the question completely, instead offering platitudes about enabling young women to work even as they raised families and the need to increase the birth rate in the US.
I interviewed Nooyi as a young reporter in New York in the early 1990s, when she was a senior executive at Asea Brown Boveri. I found her charming, direct and kind, an impression one comes away with listening to her interview on The Wire. Reading the NYT interview, however, I wondered how she could have made the comments she did about not asking for a raise at a time when equal pay for women and minorities is finally receiving some sort of redressal. Moreover, the voicing of a need for working families to be helped by employers followed by silence over frightening American laws on abortion that take away women’s rights seemed tone-deaf to me. A public relations executive might advise steering away from political controversy, but bad actions by governments can’t be wished away and ought to be addressed if one is making oneself available for interviews.
Microsoft CEO Satya Nadella made headlines several years ago when he said in an onstage interview that women who were underpaid should have “faith" that the system would eventually correct itself. He reversed the comment later that day. In a statement to employees, Nadella said, “I answered that question completely wrong. I believe men and women should get equal pay for equal work. If you think you deserve a raise, you should just ask."
When you say the wrong thing, an unreserved apology can do wonders.
Rahul Jacob is a Mint columnist and a former Financial Times foreign correspondent.
