COMPANY SPECIAL .......................... Decision making a child's play in Dr Reddy’s boardroom, thanks to a customised app

Decision making a child's play in Dr Reddy’s boardroom, thanks to a customised app

The 10-member board at pharmaceutical major Dr Reddy's thrives on diversity. Liberally sprinkled with gray hairs, who are never quite impressed with powerpoint presentations, "they want information to be pre-loaded so that the following discussions (at the board level) are fruitful," says Satish Reddy, Chairman, Dr Reddy's. That said, the company has now equipped its board members with a customized application (that runs on their tablets) to manage board agenda and related processes.

All agenda papers, action items and circular resolutions are now managed digitally and the app allows board members to make annotations, make approvals and take surveys. Once synchronized, the content could also be viewed offline. "It's a cool app that allows us to look at our folders and make annotations since we get all the information on our iPads much before the meetings," says JP Morgan India's CEO Kalpana Morparia, who got inducted to Dr Reddy's board in 2007, long before Companies Act made it mandatory for boards to have a woman director.
The MeetX app also runs on a secure platform giving a thumbs up to confidentiality that the board maintains. As the board adopted it in the beginning of this fiscal, the board meetings became paperless as poring over fat folders became a thing of the past. "It's very user-friendly and intuitive and if there are comments, it tells you what to do with them," adds Reddy.
While the app allows enhancement of the free-flowing conversations among board members, there's a certain comprehensiveness in tackling issues that the Dr Reddy's board brings. Every director is made to feel engaged over multiple issues. Take the case of Sridar Iyengar, who got inducted to the board three years ago, and heads the audit committee. "The company is extremely receptive to bold views and push initiatives only after considering every director's opinion," he says.

While whole-time directors GV Prasad (Co-chairman & CEO) and Satish Reddy represent the family with 26% stake, they are never seen to be overbearing. Last year, for example, Prasad, who was then Chairman and CEO, anointed former McKinsey leader Anupam Puri as the Lead Independent Director because he didn't want the tag of judge and the jury at the same time. "I felt it was necessary to have a separation of powers," he says.

Eventually, in May, he handed over the Chairman's designation to his brother-in-law, Satish Reddy, after several rounds of parleys with the board. In fact, as the late company founder Anji Reddy's health was fading, the issue of succession was top of mind among board members. Though Anji Reddy passed away in March 2013, the board had no hesitation in naming Prasad Chairman and CEO. On his part, Prasad too has his succession planned out—"The board has discussed possibilities about my successor as well."
In variance with high-handed owner-managers, Prasad takes regular feedback from the board constructively. "While most of the feedback is confidential, the board has told me that we should improve our performance and grow faster," he submits. The wealth of experience that the board possesses is also shared and cascaded organization-wide. When Umang Vohra was the company's CFO (now head of the US business), Morparia took time out to mentor him, as did Anupam Puri, who was also a mentor to Prasad when admittedly the latter learnt "the value of relationships" that Puri's years in consulting provided.

Dr Reddy's being a pharma company, the board has its share of industry experts with sound domain knowledge over decades. Two expats, Dr JP Moreau and Dr Bruce LA Carter, bring insights from the international pharmaceutical industry. There are also times when the duo goes for impromptu plant visits and interacts with people on the shopfloor to get a flavor of the goings-on from a risk management perspective. 

If there's a way to gauge ground-up information, which board members are proactively looking for, there is also a mechanism the company used to evaluate its board. In 2011, search firm Egon Zehnder was hired to assess the performance of the board wherein each member received a 360-degree feedback based on their performance and behavior. "There were parameters, for instance, that pointed to how much air time do some members hog, which does not really allow other members to participate in relevant discussions," says Prasad.
Apart from the statutory quarterly meetings, the board members participate in an annual offsite in a location where the company has significant business interests. This year, for instance, the two-day event took place at Cambridge, UK, where the company owns a chemistry lab. "In these events, we get analysts and market research companies to inform the board of what investors think of us," says Prasad, adding how such preliminary discussions pave the way for strategy session.

Of course, there are light moments too and the camaraderie in the board is unrivalled. Over dinner, on the first day of board meetings, for instance, a lot of informal discussions take place. Last July when the board met, one of the things that came up casually, revolved around National Pharmaceutical Pricing Authority's notification then capping prices of 108 anti-diabetic and cardiovascular drugs. "It's all about perspective building," smiles Satish Reddy, the founder's son.

By Moinak Mitra, ET31 Oct, 2014