In a report titled “ITC succession plan: Letting it go”, released on Thursday, IiAS said it believed “the board structure, and the proposed remuneration, signal Deveshwar’s continuing control over the company, which undermines the recently appointed CEO Sanjiv Puri,” adding “Once Deveshwar has stepped down, he must let go.”

IiAS said it believed that for succession planning to be effective, Puri must be allowed to step away from Deveshwar’s shadows. Therefore, instead of relying on Deveshwar’s continued presence and guidance, the board needs to reduce his involvement, it added. “If the board does not have enough faith in Puri’s competence and believes it needs Deveshwar’s active presence, then perhaps Puri is not the right choice for a successor. If the board believes Puri is indeed the right successor, it must allow him a free rein,” IiAS said asking the board not to give mixed signals to stakeholders.

The report acknowledged the contribution of Deveshwar’s reign over ITC that has created tremendous value for its stakeholders. He has been at the company’s helm for over 20 years, during which the company’s revenues grew almost 12 times to Rs 60,490 crore and profits grew 40 times to Rs 10,520 crore in 2016- 17. The market capitalisation also grew over 70 times to the current Rs 3.9 lakh crore, as investors cheered the company’s reduced dependence on cigarettes, it noted.

“Notwithstanding his astounding accomplishments, now that ITC has a new CEO, Deveshwar needs to let go and the board of ITC must quickly get used a new normal,” the report said.

ITC has been one of the handful professionally-managed and institutionally-owned S&P BSE SENSEX companies where succession planning has been a concern with investors.

Driven by the larger-than-life Deveshwar, there was a sense of nervousness on how the company will transition to a new leadership. Therefore, investors welcomed the board’s announcement of a succession plan in May 2016 that Deveshwar would step down from his executive responsibilities at the end of his term in February 2017, and the mantle would be passed on to his hand-picked successor, Puri.