After the decisive wars in Mahabharata, all the Pandavas gathered around Bhishma Pitamah to learn from him the nitty-gritty of politics, management, science, society and religion. Bhishma transfered all his learnings to the Pandavs before he could take his last breath. Similarly, in Ramayana, lord Ram requested the dying Ravan to teach him lessons of life and wisdoms. Ravana before closing his eyes, shared all his intellect with Ram and his brothers. In both the cases, two new kings (and to be kings) tried to absorb as much as they can from the dying (read: retiring) emperors. These teachings which were last words from these great rulers were passed on to the next generation in almost similar manners and which later formed our epics – that not only teaches wisdom but is more about management, politics, administration and ethics.
Today companies try to keep the learning curve alive by adopting the same concept. They leave no stone unturned to make sure that experience of dying (read: retiring) C-suite members are passed to their replacements in all possible forms. And this is precisely the reason of companies offering their retiring chairmen and CEOs a non-executive position of an emeritus. The concept of emeritus was originally practiced in the academic since centuries. However with time, this concept has spreaded its tentacles and found its way into corporate boardroom and obviously for all the right reasons. Conventionally, a chairman emeritus is a non-executive member of the board who after retirement from his position is awarded an honorary title which allows him to be a part of the company he served since decades. Interestingly, an emeritus is not made accountable for any decisions of the company but is deemed as a vital resources (as an advisor) during decision making and strategic planning. Most of the time, an emeritus uses his ‘learning-curve’ to assist the executives to take decisions and also uses his strong network for company growth and brand-building.
For instance, Abbott Laboratories has a provision wherein senior technical staff can opt for the status of “emeritus” and keep serving the company without getting involved in management and administrative roles. This allows Abbott Laboratories to retain their human capital and use them for core R&D endeavours. Further, it acts as an opportunity for middle-management to rise up the ladder and take serious and challenging management and administrative role while being mentored by emeritus who had in past served those positions. Similarly, Chevron Corporation under the aegis of ‘Chevron Bridges Program’ had opened the doors for their ex-employees to be a part of the company. These people works as technical specialists, guest speakers, recruiters, mentors, peer reviewers and thus regularly share their insights with the new fleet of managers. Even at McKinsey, top directors, post their retirement, become "director emeritus."
In India, probably it was Raymond that first adopted the concept of retaining its employee even after their tenure is over. The company went on to appoint Vijaypat Singhania as chairman emeritus even after his retirement. Camlin is another such example. Following the trend, L&T, recently decided to keep Anil Manibhai Naik on the board in spite of announcing Krishnamurthi Venkataramanan as the new CEO and MD. Naik's role now will involve more of restructuring and institutionalizing different verticals and teams. His main focal area will be leadership development. Similarly, Keshub Mahindra and Ratan Tata accepted the role of Chairman Emeritus after their retirement from executive board.
I still remember the way Narayana Murthy described his role to me when I met him almost a year back. In my meeting with him, post his retirement from Infosys, he explained his choice of being chairman emeritus rather than serving as an full time executive of the board. He told how his role has rather ‘enhanced’ as an advisor and mentor from just a manager. His duties now involve adding value to every member of the board, whenever asked.
A 2010 study by Association of Governing Boards titled “Policies, Practices, and Composition of Independent Colleges and Universities” shows that around 26% of private institutions invite most or all board members, post their retirement, to serve for any of their honorific positions. Another research by Deloitte involving S&P 500 companies showed that “20 companies from the S&P 500 had a current chairman emeritus designation. Two had a chairman emeritus within the past year and two had provisions for a chairman emeritus but the position was unfilled.”
From Steve Jobs of Apple to Bill Gates of Microsoft, almost all companies has designed avenues that allows their top thought-leaders to guide and keep the culture intact. In an interview with the Financial Times, Sir Alan Jones, chairman emeritus Toyota UK, says that “the position has no responsibility” and added, “is that you act like a kind of touchstone. You’re a reservoir of experience and keeping you on in this way helps continuity. You’re a bit like a corporate encyclopedia. It’s also part of a long-term commitment to an organisation and its people.”
Undoubtedly, allowing years of learnings and experiences to die with a dying C-suite member is not only silly but is also an opportunity-lost in terms of mentoring and counselling. An emeritus is just not about furthering the learning curve but is more about strong corporate networking, strategic consulting, head-hunting and above all brand building. As the two epics echoes, even after the war is over, the importance of the two institutions of learning was intact. In simple words, even after a CEO/chairman tenure is over, he is still worth retaining!