Underscoring concerns around succession planning at Reliance Industries (RIL), Institutional Shareholder Services Inc., a global proxy advisory company, has recommended that shareholders vote against the proposal to appoint Mukesh Ambani’s youngest son, Anant Ambani, on the board of the family-controlled conglomerate, news agency Bloomberg said.
ISS said in an October 12 note, which it shared with Bloomberg, “A vote against this resolution is warranted as Anant Ambani’s limited leadership/board experience of around six years, raises concerns on his potential contribution to the board.” It has backed the board appointments of his elder siblings, Isha and Akash Ambani, in the shareholder vote that will close on October 26.
According to the report, ISS’s objections echo the recommendations from Mumbai-based Institutional Investor Advisory Services, or IIAS, which said in an October 9 report, that “at 28 years of age”, appointment of the young Ambani scion “does not align with our voting guidelines.” IIAS has supported the proposals seeking to elect Isha and Akash.
Reliance did not respond to Bloomberg’s queries but told the proxy companies that Anant has “the relevant experience and maturity to add value to the board deliberations” given his participation in the conglomerate’s businesses and the grooming he has received from senior leadership over the years. Both ISS and IIAS added Reliance’s response to their reports.
Another international proxy firm, Glass Lewis, is in favour of Anant’s appointment. “We do not single out Anant Ambani from the other siblings based on experience,” Decky Windarto, Glass Lewis’s director of Asia-Pacific Research, said in an emailed response. “We noted that the other two directors up for election are just three years older than Anant, with similar professional experiences.”
While the induction of Anant and his elder, twin siblings as non-executive, non-independent directors, is critical to the succession plan announced by Asia’s richest person, the counterpoints from proxy advisories show that Ambani and the “next-generation” leaders at $190 billion group will continue to be in focus for corporate governance watchers.
The recommendations from ISS and IIAS also point to the evolving investor expectations from a conglomerate that now counts Google and Meta Platforms Inc. among marquee investors in its consumer businesses.
Reliance’s founders own over 41 per cent shares in the company, making them the single largest voting chunk. The three resolutions need a majority of votes cast to go through. Foreign and local institutions, that often vote based on proxy firms’ recommendations, own close to 40 per cent in Reliance. Their stance will be known after the voting closes.
Succession is a crucial issue for the billionaire. Mukesh Ambani, who was appointed to the RIL board in 1977 at the age of 20, had to tackle a bitter fraternal feud after his father died without a will in 2002.
