Who Is the Real HR Head? Rethinking the CHRO Role in Owner-Driven Companies

The title “HR Head” implies strategic autonomy and influence. But when the role lacks decision-making power, it becomes symbolic rather than functional. The HR lead may be tasked with implementing decisions but not shaping them. This undermines the very essence of HR leadership.

In the evolving landscape of organizational leadership, the title “HR Head” or “CHRO” carries significant weight. It signals strategic ownership of the people agenda, stewardship of culture, and accountability for talent outcomes. Yet, in many owner-driven or “Lala” companies—particularly in India—this title often becomes a misnomer. The real decision-maker in all matters of human resources is not the person holding the designation, but the owner or promoter themselves.

This structural reality, though widely experienced, remains under-discussed. It raises critical questions about role authenticity, organizational maturity, and the future of HR leadership in such setups.

The Disconnect Between Title and Authority

In professionally managed organizations, the CHRO is expected to:

Shape organizational culture
Drive long-term talent strategies
Influence leadership development
Ensure compliance and ethical governance
Act as a strategic partner to the CEO

However, in many owner-driven companies, the person designated as HR Head or CHRO is often reduced to an executor. The real authority over hiring, firing, compensation, promotions, transfers, and disciplinary actions rests squarely with the owner.

This leads to several critical observations:

1. Misrepresentation of Role

2. Centralized Control and Personality-Driven Culture

In “Lala” setups, people decisions are often based on loyalty, proximity to the owner, or personal rapport—not capability or performance. HR processes become person-driven rather than system-driven. Owners may override policies, bypass procedures, and make ad hoc decisions, leaving little room for professional HR governance.

3. Erosion of HR Credibility

This structural imbalance affects the credibility of the HR function:

Internally, employees perceive HR as powerless or biased.
Externally, potential hires view the organization as unprofessional or opaque.
For HR professionals, it limits growth, learning, and impact.

The result is a vicious cycle where HR is seen as ornamental rather than transformational.

Structural Realities in Owner-Driven Firms

Let’s examine why this phenomenon persists in small and mid-sized owner-led organizations:

Factor	Impact on HR Function
Limited Resources	No budget for a full-fledged HR department; owner handles HR tasks directly
Centralized Decision-Making	Owner retains control over all key decisions, including people management
Informal Work Culture	Lack of formal policies or structured HR processes
Daily Involvement of Owner	Owner becomes the de facto HR Head, making decisions based on instinct or relationships

In such environments, HR-related tasks handled by the owner often include:

Recruitment and hiring
Compensation and benefits
Disciplinary actions
Policy formulation
Employee grievances

While this may work in early stages, it becomes unsustainable as the organization scales.

Why a Dedicated HR Head Matters

As businesses grow, complexity increases. A professional HR function becomes not just desirable but essential. Here’s why:

1. Expertise and Specialization

HR professionals bring domain knowledge in:

Talent acquisition
Performance management
Learning and development
Diversity, equity, and inclusion
Labor law compliance

This expertise cannot be substituted by instinct or informal practices.

2. Legal and Regulatory Compliance

India’s labor laws are complex and evolving. A dedicated HR Head ensures:

Adherence to statutory requirements
Proper documentation and audits
Risk mitigation in employee relations

Non-compliance can lead to legal penalties, reputational damage, and operational disruptions.

3. Employee Engagement and Retention

Professional HR leaders design systems that:

Boost morale and motivation
Create transparent career paths
Address grievances fairly
Foster inclusive and respectful workplaces

This directly impacts productivity, retention, and employer branding.

4. Scalability and Strategic Alignment

As organizations expand, HR must evolve from transactional to strategic. A true HR Head:

Aligns people strategy with business goals
Builds leadership pipelines
Drives digital transformation in HR
Champions organizational development

Without this, growth is chaotic and culture suffers.

The Psychological Contract: What Titles Really Mean

Titles are not just labels—they shape expectations, identity, and influence. Calling someone a CHRO or HR Head implies:

Strategic partnership with the CEO
Authority over people decisions
Responsibility for culture and compliance

When these expectations are unmet, it creates confusion, frustration, and disengagement. It’s unfair to both the individual and the organization.

What Can Be Done?

For HR Professionals:

Build Trust Gradually: Influence decisions through data, empathy, and consistency.
Create Pockets of Professionalism: Introduce structured processes in areas like onboarding, performance reviews, and grievance redressal.
Educate the Owner: Share insights on the value of strategic HR and the risks of informal practices.
Document and Formalize: Even small wins—like a written policy or a structured interview process—can shift the culture.

For Owners:

Recognize the Limits of Informality: As the business grows, informal HR practices become liabilities.
Empower HR Leaders: Delegate authority, involve them in strategic decisions, and respect their expertise.
Invest in HR Systems: From payroll software to learning platforms, technology can professionalize HR.
Align Titles with Accountability: If the owner retains full control, designate the HR role as GM or VP—not CHRO.

Time for a Cultural Shift

The real transformation lies in shifting from personality-driven to process-driven leadership. This means:

Institutionalizing HR policies
Respecting role boundaries
Valuing capability over loyalty
Creating a culture of transparency and fairness

Until this shift happens, calling someone else the HR Head in a “Lala” company is often misleading. It’s not just about semantics—it’s about integrity, clarity, and organizational maturity.

In Conclusion

Yes, in many owner-driven organizations, the true CHRO is the owner. Titles like “HR Head” or “CHRO” should reflect not just hierarchy but strategic influence and accountability. Mislabeling roles dilutes the profession and confuses stakeholders.

As India’s business ecosystem matures, it’s time to align HR titles with real responsibility. Let’s move from ornamental designations to authentic leadership. Let’s empower HR not just in name, but in practice. For further insights into the evolving workplace paradigm, visit