The Indian Business Standard reported that Roopa Kudva has resigned as CEO of CRISIL. Quoting Kudva, a CRISIL statement said, “Change at the top at judicious intervals is a sound governance practice and allows companies to refresh themselves. I am committed to ensuring a smooth transition.” Kudva would remain at the company till a successor was identified and appointed, CRISIL said. The nomination and remuneration committee of the board of directors would oversee the search, it added, without specifying a deadline. Douglas L Peterson, chairman of CRISIL and CEO of McGraw Hill Financial, said: “We respect Roopa’s decision and appreciate that she will continue to manage the affairs of CRISIL until a successor is appointed.”
Kudva had joined the rating agency in 1992. Before spending seven years as chief executive and managing director, she was leader of CRISIL’s ratings business. During her tenure as managing director and chief executive, CRISIL’s market capitalization increased from Rs 2,900 crore to Rs 14,000 crore.
After the global financial crisis of 2007-08, she decided to aggressively pursue a diversification policy, rapidly building new income streams, to reduce dependence on the ratings business. In September 2010, CRISIL bought First Source’s equity stake in Pipal Research, a knowledge processing outsourcing unit, for Rs 58 crore. In 2005, S&P acquired 49.07 per cent stake in CRISIL through an open offer, becoming the majority shareholder (58.5 per cent stake). In 2013, S&P, through another open offer, raised its stake to 67 per cent.
According to the Indian Business Standard, employees at the rating agency refused to comment on whether differences with parent S&P on management and strategy had triggered the move. A senior foreign bank executive who was earlier with CRISIL said as the rating agency had a strong culture of talent-grooming, there was a pipeline of able managers to choose from.
Editorial Comment: The question about differences in strategy may be justified because the parent company has a new broom by the name of Neeraj Sahai, who became president of S&P last November. The comment about the talent pool is interesting. That may be but the head of the parent company came from Citibank, so did Sahai, thus there is a strong possibility that the next president of CRISIL may also come from Citibank.