By admin
The buoyant Indian start-up system, backed by big bulge private equity and venture funds certainly was shocked at the news of BharatPe co-founder and his family’s indulgences and misappropriations. Surely, the misdemeanor not only dented BharatPe, but the entire eco-system got shaken. When a pedigreed entrepreneur (IIT topper, IIM alum) is seen to have indulged in unscrupulous acts it certainly shakes the confidence of a number of stakeholders. Be it investors from distant lands, or executive teams joining start-ups, their state would be summed up in the Urdu couplet
ये दाग़ दाग़ उजाला, ये शब–गज़ीदा सहर
वो इन्तज़ार था जिस का, ये वो सहर तो नहीं *
This is neither the first act of corporate misgovernance nor perhaps will be the last. BharatPe Board is now conducting a governance review. However, whether a founder indulges in acts of misappropriation or is blind to acts of her/ his confidantes, the moot question is how does one mitigate the risks. Risk emanating from excessive concentration of power or people with accountability abandoning their soul at the altar of greed.
A research in 1995, by cross-culture pioneer Geert Hofstede, had revealed that Indian business leaders pursued goals such as continuity of the business, well being of family, patriotism, and long-term profit ahead of personal wealth; whereas the American business leaders’ top pursuits were perceived to be, focus on short-term profits, personal wealth and power.
It is difficult to say whether BharatPe is a case of erosion in values of Indian entrepreneurs or an isolated case of individual greed. However, one thing is clear, there is a need for institutional safeguards to be put in place. Safeguards, which keep the conscience and positive core of the promoters/ upper echelons in alignment.
One simple, yet powerful way to accomplish this is to set up a governance council or an independent supervisory Board without waiting for the force of listing obligations. A Board that brings expertise, is truly committed, and has an element of independence from the Executives running the show. And having constituted such a Board, calibrate it regularly which helps them to
- Perform without inhibition
- Complement the Executive team’s efforts to achieve superior results and
- Provide assurance and comfort to the stakeholders that ‘all izz well’
If you are a start-up’s founder or the investor company captain, get in touch with us to learn how we partner with Founders/ Chairpersons/ NRC chairs/ Company Secretaries to calibrate their Board performance and go beyond the agency conflict to convert their leaders into true stewards
* A poem by Pakistani poet Faiz Ahmed Faiz, he had written it to express his disappointment when upon attaining freedom from British, India was divided to create Pakistan. Roughly translates as This stained light, this night-bitten dawn; This is not that long-awaited daybreak