Dev Bajpai, Executive Director - Legal and Corporate Affairs & Company Secretary - Hindustan Unilever, extols the virtues of transparency, integrity, fairness and good governance
LE: What led you to pursue a combination of Law & Company Secretary. Please walk us through your early years in this field.
The qualifications of Law & Company Secretary complement each other very well. Law is a subject which either interests or disinterests one and for me, it was the former. I did my LL.B. from Delhi University and I thought an additional qualification that focused on governance, law, ethics & taxation would come in handy. Both these courses fascinated me enough not to think of a career in the civil service.
My early years were very useful in making me a rounded legal professional. What helped me was both the variety of cross-industry experience and that of the subjects I dealt with within each industry. During those days, the new Industrial Policy had been announced and steps had been taken to free capital markets from controls. There was a lot for legal and governance professionals to do. The legislative landscape was fast changing and whilst this change was happening, there were new opportunities for Indian industry as a whole and lawyers had an important role to play.
I started my career with a MNC which was into consumer durables. The start was uneventful as I realized, I was doing the same work through the year. I switched to Maruti Udyog Limited (as it was at the time) and was employed in one of their Joint Venture Companies. This was a period of immense learning for me. From Corporate laws, taxation - both direct and indirect, Exim issues, foreign direct investments, I got a variety of issues to handle independently. It was a rewarding period for me, and I credit my successful journey to my seniors who had the faith in me that I could deliver. The fortunes of the auto components industry were linked to the parent and the automobile industry at the time was synonymous with Maruti which was doing exceedingly well. There were opportunities for foreign collaboration within the auto components sector, and we started supplying both to the European markets and to the Japanese.
It was then time to join the parent company itself and deal with the International Arbitration that ensued amongst MUL, Suzuki Motor Corporation & Government of India. There were many issues that we had under the then MRTP Act and Consumer Protect Act. This gave me hardcore legal experience dealing with litigation, corporate laws, international arbitration and also a plethora of sales & service matters that Maruti had to deal with and defend. As Deputy Company Secretary, I was also dealing closely with the Government of India nominees on the Maruti Board and I had to get approvals for import of technology for different brands and deal with Board and Governance matters.
I then moved to Mumbai to begin my FMCG journey with Marico.
LE: You are a first-generation lawyer, what inspired you to take up law as a profession?
I grew up in a middle-class family with middle-class values where we were taught early that the only way you can succeed is through hard work and merit. My father worked for 35 years with the Government of India. My siblings & I picked up useful lessons of life during those years when my father was in the Government. Integrity, Service orientation towards others and doing the right thing have always stayed with me from an early age.
We have had mostly civil servants and lawyers in our family. It was either going to be the civil service or law and once I decided that I did not want to pursue a career in civil service; it was going to be law. Having grown up in a family which had imbibed in us the values of always following the law, doing the right thing and learning to live within the means available, it was easy to embrace law as a subject to study and make a career out of. Besides, I found it very interesting.
LE: You have a degree in law from Delhi University and have also done an Executive Program for Corporate Counsels conducted by Harvard Law School. How does our legal education compare with that in the West?
The program at Harvard was a short stint and not a formal degree. But replying to your question, I think, the Indian legal education system is quite comprehensive and helps one become a rounded lawyer, whether in practice or in industry. If it is coupled with a degree from the Institute of Company Secretaries of India, it complements your law degree and makes you near complete. The Harvard program was a useful program where very illustrious Professors taught us various subjects with the use of case studies. The good thing about such programs is that they have a strong alumnus network and the education never seems to end. Learning never ends. You learn, unlearn, and relearn. The HLS is a great place of learning and they use the case study pattern which makes it even more interesting. I have kept in touch with the faculty that taught us and when anyone is in India, I make it a point to schedule a session with them for my team.
LE: Currently you are serving as Executive Director, Legal & Corporate Affairs & Company Secretary at HUL & Vice President, Legal for South Asia. How do you balance these twin roles?
My core role of ED for Legal & Corporate Affairs of HUL keeps me fully occupied and I am accountable for all legal, governmental and governance issues besides being a part of the Board & the Management Committee. HUL is a Euro 5.3 Bn business with a large footprint across the value chain. It is the second biggest operating company of Unilever after our US business and the South Asia cluster is about Euro 7 Bn.
In addition to what you describe as my role, for the last three years, I have another Unilever cluster that comprises North Africa, Middle East, Turkey, Russia, Ukraine & Belarus - NAMETRUB in short that I have oversight over. It is an amazing experience to deal with issues, whether risks or opportunities, in diverse countries where Unilever has businesses. The legal systems and the regulations are different. Many countries in South Asia and also some other countries outside South Asia follow the Anglo-Saxon jurisprudence. The diversity of legal systems bring about a lot of learning and also provides an opportunity to apply the experience of one country to another. Recently, I was studying the proposed Digital Services Act in the EU and comparing the provisions with our proposed E-commerce Policy. There are common issues like Privacy, Brand Protection, Anti-Trust, advocacy on right Regulation that legal functions deal with and there are considerable synergies that exist to be leveraged. We have, as a team, developed a model for Anti-Trust law for those countries that do not have an anti-trust law, or its enforcement is low. It is an exciting and multi-faceted role where one is dealing with multiple issues from sanctions in Iran to structuring opportunities in the Middle East to privacy regulations across countries. As I said whether risks or opportunities, the legal function has been at the forefront.
Managing time and ensuring that I am able to deal with all important issues is always a challenge, but I have a competent team. Almost 40 to 50% of my time is spent in shaping the right regulation through our advocacy efforts. In the recent past, the areas we have focused on are Consumer Protection law, E-commerce Policy, Legal Metrology Rules, Personal Data Protection Bill, IP Regulations, Labour Codes, Anti-Profiteering Rules, Proposed Industrial Policy, Cosmetics Regulations and so on and so forth. It is an important agenda and an ongoing one for the Legal & Corporate Affairs team. As the Law Department, we have set in place robust systems and processes and constantly review them. We have a clear strategy in place that lays down our charters of work. This gives us the focus and energy to perform our roles to the best of our abilities.
LE:Times have changed & today, Legal Heads too are sought after for becoming members of the Board. What is your take on this?
The legal function is a specialist function, but the conventional role of a Legal Manager has undergone change. In many Corporations of repute, lawyers have been heading the Organization as well. The legal function is and can become a source of competitive advantage. In HUL, the legal function has been a profit centre and not a cost centre. The legal function plays both a partner and a guardian role. As a function, we have always considered ourselves as contributing to the growth agenda and I insist that members of my team should display two attributes besides functional knowledge. These are an opportunity seeking mindset and being proactive in approach. If the thinking & mindset is tuned to display these behaviors in all facets of work, we get into generating new ideas, innovating at work, and finding long-term solutions to issues. While doing all this, we remain deeply rooted to our values and remain connected to consumers. Our focus is both on growth and risk mitigation. I firmly believe that lawyers have a role to play in getting growth for the Company and when you do that, one is at the forefront of the organizational agenda. One is constantly looking for growth opportunities. This mindset is important.
With good grounding, years of multi-faceted experience and focus on growth and embracing excellence in governance, if lawyers can contribute at the Board level, they should definitely be inducted into the Boards. I do not see an issue.
LE:You have a diverse experience of 3 decades and have worked with the likes of Maruti, Marico, Taj, ICICI Venture & now HUL. Can you describe your key learning and what has been the experience of working in each of these Organizations?
I truly believe that working in different industries makes one a rounded professional in whatever field one is in. I started my career in consumer durables then moved to automobiles, hospitality, Private equity and FMCG. The last 32 years have been spent in these different industries. Also, this has to a large extent, shaped me and I am grateful to my mentors & seniors in these Organizations who have played a role in shaping me. Also, another aspect has been that the values of these Organizations matched with my own personal values and this is an important factor in one's effectiveness. I have had a rewarding career and have got some great opportunities early on to deal with projects and issues. These opportunities gave me a lot of learnings, both during the Government control era and thereafter. I had the opportunity, early on in my career, to deal with the bureaucracy at the Centre and in the states both on Policy and Legislative matters and on operational matters that helped my external orientation. A few examples for the benefit of younger readers of your publication are issues around foreign investment, setting up of EOUs, amendments to the EXIM Policy, Sales tax incentives & their adverse impact under Income tax law and how it stood corrected, International Arbitration, De-reservation of several items for exclusive manufacture by small scale that had lost their relevance, setting up a PE fund, investing in portfolio companies and then divesting including invoking of a Key Man clause etc. and a spate of acquisitions & divestments in and outside India are some areas of exposure and learning that I have had that have helped me in the latter part of my career.
One important learning for me has been that functioning with the highest Integrity helps immensely. Integrity is non-negotiable and when one follows this principle in life, one is able to meet challenges, find solutions and carry people with oneself. One can sleep peacefully. Doing the right thing always and insisting that others do it is important. One can in one's career get enticed by the easier wrong, but the harder right should be practiced in both on and off work life. When one does the right thing, the right outcomes follow. The other thing I have learnt is to remain relevant not for who you are but for what you do. It is to focus on issues at hand and finding long-term solutions.
Most importantly, as lawyers,
learning never stops.
We have to learn, unlearn, and relearn and stay ahead of the curve. As we learn and grow in whatever we do, we should be humble enough to remain rooted and connected to our values, our background and where we came from.
LE: Governance & Compliance are key to structuring an organization. In your view, to become a next generation Governance Organization, what are the key steps and how does one balance risk and ethics? How can the Organization be accountable and transparent?
Governance, Accountability & Transparency are the cornerstones of a corporation's reputation and the stakeholders' expectations rightly are that these form the very basis of any Corporation that they invest in or engage with. Howsoever small a business is, if it is run with a conscience, it will sustain and, in the long run, create shareholder value. It has been proved time and again that stakeholders reward well governed corporations.
Corporate Governance has received a lot of focus in our country over the last two decades and rightfully so. The regulations have been shaped in a manner to enhance governance in the corporate sector and this has helped a great deal. However, the great get distinguished from the good when they go beyond the regulations and embrace next generation practices beyond what the regulations mandate when it comes to important subjects like governance & sustainability. As a Corporation, Unilever has always believed in "Doing Well by Doing Good" We have embraced the 4G model which stands for consistent growth, competitive growth, profitable growth and, most importantly, Responsible Growth. We believe that Brands with Purpose Grow, Companies with Purpose Last, & People with Purpose Thrive. This is integral to our business strategy. Our Business Integrity Code and the associated Code Policies guide us on what our conduct should be both at and off work.
In order to become a next generation organization in terms of governance, it is imperative for Organizations to look beyond and embrace a model of growth that is sustainable and responsible. We cannot function in the society and remain oblivious to the issues that the society faces whether it is water conservation, health & hygiene, enhancing livelihoods or any other issue. These are live issues that the society today faces. So, you see, service to society has to be a key lever and an integral part of any successful business strategy.
There is a trust and ethics deficit today reflected in some of the recent cases that have surfaced in the Indian Corporate sector. There is a realization now that business when conducted in an ethical manner will be rewarding in the long run and thanks to the regulations that have been shaped over the last two decades which have facilitated this thinking. Unlike the West, where a lot of governance practices were shaped out of jurisprudence, in India, it has been largely regulation that has shaped corporate governance. India is at a cusp where it can leapfrog into embracing the next level of excellence in corporate governance with a large number of listed companies functioning with high governance norms. Some recent cases where governance was compromised have shown how badly governed companies have no future and how they destroy all shareholder value. Consequently, they are penalized by markets, regulators, and Courts. The industry has to partner with the Government in ensuring that we raise the bar on governance, trust, transparency & fairness. Corporations have to realize that they are under scrutiny and they should embrace the highest governance practices in all facets of their business and should be open and transparent in dealing with stakeholders. This is the very least that stakeholders can expect. For smaller corporations who may be unlisted today but may want to tap the capital markets, they should focus on embracing a culture in which ethics, fairness, meritocracy, compliance, openness, and transparency thrive. This will serve them well in the long run.
LE: How will the troika of automation, artificial intelligence & analytics shape the future of in-house legal departments? Does this impact the prospects of young lawyers?
Law Departments are not immune to the digital transformation or newer technologies that we see today. In fact, at HUL, we have not only noticed the change but have embraced it. At HUL, we had set into action a full Legal function Process Assessment from a technology and process perspective last year and have completed the exercise. It has been a very meaningful and insightful exercise that will considerably enhance the efficiency of the Law Department. All our important work areas are now automated and we use tools that are customized to the processes that we have adopted and, wherever, there was a need to write a fresh process or modify it, we have done that. This exercise helps release additional time for the lawyers to embrace important agenda under our South Asia Legal Strategy and also gives time to the Leadership Team to focus on building capability, having a development plan for each lawyer and making the team future fit in every respect.
While this troika will clearly bring about greater efficiencies in the Law Department, it cannot replace the core role of a lawyer, his/her business partnering and advocacy skills and so many other areas that lawyers are contributing to. So, I do not see any downward trajectory in the prospects of the young lawyers. In fact, I see greater opportunities for them today than before because of newer & emerging areas of work like data privacy, consumer law, bio-diversity, labor codes, newer mediums like mediation and ODR platforms, newer skills, varied expectations, greater integration with business and need for higher governance norms. Lawyers in my team are more engaged and occupied than they were in the past because of the exciting new areas of work and our Legal agenda.
LE: You have had the privilege of representing the Industry before Parliamentary Committees. Which areas need attention in your opinion, and have you received the kind of support you expected from the Government?
I have had the privilege to appear before two Parliamentary Committees to lead oral evidence on behalf of the Industry when the Bills were referred to the Standing Committees attached to the subject concerned. I am waiting for our turn to appear before the Joint Select Committee constituted to deal with the Personal Data Protection Bill where we have been informed that we will get representation in response to our comprehensive recommendations.
My experience tells me that if recommendations are made on legislative reforms keeping the broader stakeholder interest in mind, the likelihood of their acceptance is higher. I recall when I appeared before the Standing Committee dealing with the Consumer Protection Bill about four years ago, we made several meaningful and logical recommendations and most were positively viewed by the Committee as was apparent from their Report and later many were accepted and are today part of the Consumer Protection Act, 2019.
I think the Government is looking for meaningful partnering in this area and I see a lot of receptiveness from the Government's end as it pursues its legislative agenda. Even during COVID times, we have had several engagements with the Government on legislative changes and we see a high degree of receptiveness and appreciation. We see a purposeful approach.
At HUL, we spend a lot of time on advocacy issues and this is done in a systematic manner deploying what we call our Advocacy Spin Wheel and the Regulatory Funnel. This includes, spaces that are unregulated, those that are regulated but the regulation is not optimum and areas where Government is, presently examining, need for amending the regulation. We make important contribution in shaping regulations not just with respect to Central laws but also State laws, given our pan India presence. Lawyers in my team have pivoted from reacting and managing issues to proactively addressing them and in not just ensuring compliance with regulations but, more importantly, shaping regulations wherever possible.
LE: There is much debate on the ways in which the Indian economy will bounce back post COVID. How will India sustain these times? How will India become a US$ 5 trillion economy? What are the expectations from the Government? What are your thoughts?
India truly has the potential to become a US$ 5 Trillion economy. However, this will require a series of reforms starting with Land Reforms, Labour Reforms, Financial Sector reforms. The other area of reforms includes legislative reforms which will include areas like Industrial & Manufacturing sector, Exim sector, Corporate Laws, Taxation Laws, Ecommerce etc. Still other areas are Judicial Reforms, and reforms in the way our criminal justice system functions. The Atmanirbhar Bharat is a great theme and we need some success stories to come out of it; if required, Government support can be provided to make them succeed. This will give the confidence to the Industry to put capital behind this program.
If I were to give you recommendations on each area of reforms, it will take a lot of time. I am happy to share my suggestions on each of these areas separately. Land Reforms themselves have several recommendations so also labor reforms. The recent notification of labour codes is a step in the right direction and what is now required are practical rules around these Codes that are drawn up harmoniously between the Centre and the States to let the industry function with a degree of flexibility that the Codes provide both in letter and spirit.
Similarly, judicial reforms are an area where there can be several recommendations that can be made as also legislative reforms. Industry has also made several recommendations in both these areas and it is receiving consideration in the Government quarters. The approach should be that for each new law that is enacted, at least two archaic laws should be repealed and, before enacting a new law, it should be subjected to certain tests like impact of the proposed law, outcomes expected, implications of no regulation in the long run, ease of implementation and so on and so forth. Similarly, for any new Government institution that gets set up at the Centre or in the States for the right reasons, one may consider taking the approach of examining which existing institution can be merged with the institution to realize greater public good at lesser cost. I know this is a tough thing to do but what will help is a mindset on those lines. As a nation, we need a more entrepreneurial mindset if we have to become a US$ 5 Trillion economy. Things are changing but to realize this objective, a plethora of reforms and change in mindset is required.
I remain very optimistic that India will attain this milestone sooner than later. While COVID has been a dampener, the worst may be over as many experts have predicted. There has been uncertainty but there are also opportunities.
LE: The Government is looking at Online Dispute Resolution (ODR) as a replacement for ADR even post COVID. What do you think?
Any progressive step either in substance or design to bring about a resolution to disputes is welcome and I believe that ODR is a progressive step. I think ODR is going to catch on and it should be fully supported. ODR can also be repurposed to include mediation given that mediation is receiving increasing legislative acceptance. Some of the laws like the Consumer Protection Act, 2019 and the Labour Codes recognize mediation. The Industry should fully support the Government in making ODR an alternative platform to redress dispute resolution. There may be challenges in this new medium like maintenance of confidentiality etc., but no challenge should deter us from embracing this mechanism of dispute resolution.
LE: How has the Lockdown impacted your business? The Lockdown has blurred lines between the work and personal space. How are you coping in these times?
Indeed, it has impacted our business. It has been tough for the Industry. They say necessity is the mother of all invention. I think adaptability is also. It is how one adapts to the new normal or should I say never normal. As an Organization, we have focused on safety and wellbeing of our people, supply- demand, communities, and cash & cost. This has put us on the right course. Safety and wellbeing of our colleagues has been our topmost priority. The Organization has taken several steps to ensure that. In the initial stages of the Lockdown, from the last week of March and through April and half of May, it was all about unlocking our operations following the highest standards of safety across India in our own and dedicated factories numbering about 70 to warehouses and distribution centers to reach the consumers and, thereafter, we pivoted to spotting and responding to consumer behaviors and trends through innovative offerings. Cocooning, e-everything, clean living, work from home economy are some of the trends that we are responding to. For the Legal function, it was all about getting our operations unlocked in March to early May and then, it was about how to partner in landing growth for the business.
The current times are unprecedented. The virus is a leveller that has impacted mankind as a whole and it makes no difference between the Developed and the Developing & Emerging world, but its impact is obviously far more adverse on developing nations. The Geo-Political and economic situation is a difficult one and it is time for what we call compassionate capitalism so that the fruits of capitalism reach those who need it the most.
Personally, for me, it has been challenging and having to deal with issues beyond the sub-continent, managing time has been a challenge.
LE: What is your advice to the young lawyers?
Well as I said earlier, always maintain integrity in whatever you do. Integrity, Fairness, Respect will carry young lawyers ahead in their careers. Identify your Purpose early and strive to achieve it. Believe in the harder right than the easier wrong. Doing the right things will lead one to the right outcomes and when you look for solutions, think hard and find solutions that not just help the Corporation that you serve but also help the communities, Regulators and the Industry. Be a student all your life.
In short, like I tell my team don't be just a Lawyer, be a Citizen Lawyer.