Why Indian pharma needs more expats on boards
Expats at the helm can help improve corporate governance and transparency
Among the leading companies, only a handful of them – Dr Reddy’s Labs, Lupin, Glenmark and Biocon – have expat representation on their boards as well as at the top management level. As headwinds in every drug market have intensified, a geographically diversified board and senior leadership have become an imperative. Expats at the helm can help in improving corporate governance and transparency, shaping the strategy and in adopting industry best practices – the much highlighted aspects of Indian pharma companies.
Dr Reddy’s Labs has the most globalised leadership amongst Indian pharma companies. The company, in June, promoted its COO Erez Israeli, a former Teva executive, to be its CEO. It has two expats on its board and has expats heading its North America generics and biologics businesses, respectively.
Lupin too has expats heading its Europe, Middle East & Africa, Asia Pacific & Japan, Latin America and Specialty USA businesses, besides a few serving on the board. Biocon has expats on its board and it recently roped in an expat to head its biologics business. Glenmark Pharma has two expats, respectively, on its board as well as in the senior management.
Except for having a former CEO of Teva as non-executive chairman of its board, Sun Pharma does not have an expat in its senior management. Similarly, Cipla -- a late entrant in the US generics market -- does not have any expat presence in its senior management. Data from Bloomberg show Aurobindo Pharma, Cadila Healthcare and Torrent Pharma neither have expats on their boards nor in their senior management ranks.
Smaller Indian pharma companies such as Ipca Labs, Divi’s Labs and Natco Pharma too have no representation of global talent on their boards or top management.
Indian pharma can take a leaf from the Indian IT industry. The export-oriented sector in India whose success preceded that of the pharma sector, has managed to diversify its boards and in some cases senior management, too. Companies such as Infosys, Wipro and HCL Technologies have expats on their boards as well as senior management.