The lone wolf
Amit Tandon is taking on the high and mighty of the corporate world. But there are challenges, too.


- Feb 6, 2018,
- Updated Feb 7, 2018 4:27 PM IST
The season has just got over for us," says an exhausted Amit Tandon, looking at the deserted cubicles in a 4,000 sq. ft. ground floor Central Mumbai office. Tandon is the Co-founder and MD of Institutional Investor Advisory Services (IiAS), which provides professional advice to institutional investors on corporate governance issues. The season he is referring to is the period towards the end of the first quarter when most companies hold their annual general meetings (AGMs). "Everyone is kind of taking it easy," smiles a clean-shaven Tandon, wearing a black suit.
The smile says a lot, for this ICICI Group veteran, who last headed Fitch Ratings' India office, is facing a `1,000 crore defamation suit from cigarette major ITC. The reason is IiAS' advice to ITC shareholders to vote against a resolution for a monthly remuneration of `1 crore to Y.C. Deveshwar, now the non-executive chairman. For Tandon, who is out on a mission to question the goings-on in corporate India, these challenges are an occupational hazard. He is at ease, just like Inspector Morse, the character of his favourite British TV detective series that he loves to watch and which, perhaps, keeps his investigative instincts sharp
Tandon's job, after all, isn't too different from that of Inspector Morse. At work, he is glued to his laptop - scanning thousands of board resolutions to find hints of lax corporate governance, calling up companies for clarifications and writing theme-based reports for improving governance at companies. A lean staff of two dozen professionals, from auditing to legal, are within a shouting distance in a busy day. The task is huge, for under their watch are 700 large companies, accounting for 90 per cent of India's stock market capitalisation. The end product is a small piece of advice for institutional investors to either vote 'For' or 'Against' a board resolution. The investors may or may not accept their advice but for corporates whose resolution(s) are under the IiAS's scanner, the implications are huge. "Corporates will try and muzzle our opinion, but we will have to wait and watch (the ITC case)," says Tandon, a product of New Delhi's St. Xavier's High School and St. Stephen's College, neither agitated nor distracted by the suit.
In a short span of seven years, IiAS has managed to send shivers down the spine of several big promoters. Be it the Tata Group, Infosys or ITC, IiAS has been giving its opinion on every major issue concerning shareholders. For decades, corporate governance practices were never the topic of discussion, forget a public debate. Even independent directors did not have the courage to oppose promoters.
Not anymore. Recently, in the US, an activist investor, Nelson Peltz, unsuccessfully contested for a board seat at the $65-billion Procter & Gamble. The three biggest proxy advisory firms - Institutional Shareholders Services (IIS), Glass Lewis and Egan Jones - put their weight behind Peltz. India has not seen such investor-activism, but institutional investors are waking up here, too, partly due to the regulatory push.
IiAS also publishes thematic pieces. Some of the recent write-ups have covered topics such as women on boards, royalty payments outpacing profits and corporate social responsibility. "They come up with thought-provoking corporate governance themes. So, it is not a mechanical evaluation. They are trying to take a deeper of how governance practices should evolve," says Maheshwari of DSP BlackRock Mutual Fund. "We try to stay relevant throughout the year," says Tandon.
The business model, however, is still evolving. "We initially thought we will sell individual action reports (such as on M&A, demerger)," says Tandon. But when they started operating, they realised this won't work. IiAS was initially engaged by private equity firms. Now, the core clients are mutual funds, insurers, foreign institutional investors, domestic pension funds and high net worth individuals. "It was a learning for both us and clients," says Tandon. "We have seen institutional investors who were not even reading the resolutions are now analysing them carefully," says Tandon.
The proxy-advisory business is expected to grow as corporate governance takes centre stage. Institutional investors as well as portfolio advisory companies are already taking up issues wherever they feel the decision is not in the interests of shareholders. Issues such as managerial compensation, related-party transactions, valuation, protection of minority shareholders' interest keep hitting headlines.
"The good thing is that institutional holding in companies is going up. The institutions have also started voting," says Tandon. Absenteeism, which was 26 per cent three years back, is now 10 per cent. There is more awareness now but this seven-year-old firm is also making the right noises. "A lot needs to be done," says Tandon, who is scouting for the next big issue to create a buzz in the corporate world.
Tandon is a busy man. Ask him about the most satisfying moments of his job and he says in a lighter vein that they have bragging rights on Nandan Nilekani's comeback. IiAS was the first proxy advisory firm to root for Nilekani after the fight between founders and professionals came out in the open. Infosys' Vishal Sikka resigned as CEO at 9 am on August 18. "Our report suggesting Nilekeni for the top job was up at 12," says Tandon, who has a defamation battle waiting for him. The case will also decide the fate of the fledgling proxy advisory firms in India. But this Inspector Morse enthusiast is enjoying the game. "While none of us knows what will happen in the end, we are very enthusiastic about what we are doing," he says.
The season has just got over for us," says an exhausted Amit Tandon, looking at the deserted cubicles in a 4,000 sq. ft. ground floor Central Mumbai office. Tandon is the Co-founder and MD of Institutional Investor Advisory Services (IiAS), which provides professional advice to institutional investors on corporate governance issues. The season he is referring to is the period towards the end of the first quarter when most companies hold their annual general meetings (AGMs). "Everyone is kind of taking it easy," smiles a clean-shaven Tandon, wearing a black suit.
The smile says a lot, for this ICICI Group veteran, who last headed Fitch Ratings' India office, is facing a `1,000 crore defamation suit from cigarette major ITC. The reason is IiAS' advice to ITC shareholders to vote against a resolution for a monthly remuneration of `1 crore to Y.C. Deveshwar, now the non-executive chairman. For Tandon, who is out on a mission to question the goings-on in corporate India, these challenges are an occupational hazard. He is at ease, just like Inspector Morse, the character of his favourite British TV detective series that he loves to watch and which, perhaps, keeps his investigative instincts sharp
Tandon's job, after all, isn't too different from that of Inspector Morse. At work, he is glued to his laptop - scanning thousands of board resolutions to find hints of lax corporate governance, calling up companies for clarifications and writing theme-based reports for improving governance at companies. A lean staff of two dozen professionals, from auditing to legal, are within a shouting distance in a busy day. The task is huge, for under their watch are 700 large companies, accounting for 90 per cent of India's stock market capitalisation. The end product is a small piece of advice for institutional investors to either vote 'For' or 'Against' a board resolution. The investors may or may not accept their advice but for corporates whose resolution(s) are under the IiAS's scanner, the implications are huge. "Corporates will try and muzzle our opinion, but we will have to wait and watch (the ITC case)," says Tandon, a product of New Delhi's St. Xavier's High School and St. Stephen's College, neither agitated nor distracted by the suit.
In a short span of seven years, IiAS has managed to send shivers down the spine of several big promoters. Be it the Tata Group, Infosys or ITC, IiAS has been giving its opinion on every major issue concerning shareholders. For decades, corporate governance practices were never the topic of discussion, forget a public debate. Even independent directors did not have the courage to oppose promoters.
Not anymore. Recently, in the US, an activist investor, Nelson Peltz, unsuccessfully contested for a board seat at the $65-billion Procter & Gamble. The three biggest proxy advisory firms - Institutional Shareholders Services (IIS), Glass Lewis and Egan Jones - put their weight behind Peltz. India has not seen such investor-activism, but institutional investors are waking up here, too, partly due to the regulatory push.
IiAS also publishes thematic pieces. Some of the recent write-ups have covered topics such as women on boards, royalty payments outpacing profits and corporate social responsibility. "They come up with thought-provoking corporate governance themes. So, it is not a mechanical evaluation. They are trying to take a deeper of how governance practices should evolve," says Maheshwari of DSP BlackRock Mutual Fund. "We try to stay relevant throughout the year," says Tandon.
The business model, however, is still evolving. "We initially thought we will sell individual action reports (such as on M&A, demerger)," says Tandon. But when they started operating, they realised this won't work. IiAS was initially engaged by private equity firms. Now, the core clients are mutual funds, insurers, foreign institutional investors, domestic pension funds and high net worth individuals. "It was a learning for both us and clients," says Tandon. "We have seen institutional investors who were not even reading the resolutions are now analysing them carefully," says Tandon.
The proxy-advisory business is expected to grow as corporate governance takes centre stage. Institutional investors as well as portfolio advisory companies are already taking up issues wherever they feel the decision is not in the interests of shareholders. Issues such as managerial compensation, related-party transactions, valuation, protection of minority shareholders' interest keep hitting headlines.
"The good thing is that institutional holding in companies is going up. The institutions have also started voting," says Tandon. Absenteeism, which was 26 per cent three years back, is now 10 per cent. There is more awareness now but this seven-year-old firm is also making the right noises. "A lot needs to be done," says Tandon, who is scouting for the next big issue to create a buzz in the corporate world.
Tandon is a busy man. Ask him about the most satisfying moments of his job and he says in a lighter vein that they have bragging rights on Nandan Nilekani's comeback. IiAS was the first proxy advisory firm to root for Nilekani after the fight between founders and professionals came out in the open. Infosys' Vishal Sikka resigned as CEO at 9 am on August 18. "Our report suggesting Nilekeni for the top job was up at 12," says Tandon, who has a defamation battle waiting for him. The case will also decide the fate of the fledgling proxy advisory firms in India. But this Inspector Morse enthusiast is enjoying the game. "While none of us knows what will happen in the end, we are very enthusiastic about what we are doing," he says.