The fiascos at Infosys and Tata Sons show that succession planning in Indian businesses is not easy and that promoters still hold maximum control
OVER THE PAST TWO DECADES, I HAVE BEEN LECTURING on Indian business to overseas audiences. Without exception, someone would bring up the question of corruption in India based on the rankings of agencies such as Transparency International. This would often lead to a discussion on whether all Indian companies were tainted by poor corporate governance and business practices.
While not disagreeing with the general thrust of the argument, I would observe that we cannot paint all Indian companies with the same brush. For example, one should consider corporates like Infosys or the Tata Group that meet, or even exceed, global standards. In my 2009 book, India’s Global Powerhouses, I wrote extensively about their exemplary business practices. Consequently, it is with considerable distress that I have observed the battle in the boardroom of these two corporates over the past year.
The separation of control from ownership in publicly listed companies requires effective corporate governance. As investors have limited visibility, it gives rise to the ‘agency problem’, where managers, as agents, may not run the company in the best interests of shareholders. In theory, the board of directors is supposed to protect the investors since the management has considerable discretion in running the firm. The board ensures that the management does not ‘steal’ funds through private planes and plush carpets and also directs it to suboptimal projects from the investors’ perspective.
Denne historien er fra January 19, 2018-utgaven av Forbes India.
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Denne historien er fra January 19, 2018-utgaven av Forbes India.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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Home-Cooked Meal Is Now Greatly Valued
The pandemic has also brought with it an improved focus on hygiene, use of technology in dining, rise of cloud kitchens and resurgence in popularity of Indian ingredients
Paytm 3.0 - Reaching Near Breakeven In Two Years
As of 2020, Vijay Shekhar Sharma’s super app for financial services had run up losses in thousands of crores. Now, as digital payments gets yet another boost courtesy Covid-19, he’s hopeful of reaching near breakeven in two years
THE PANDEMIC HAS CAUSED WOMEN GREATER LABOUR PAIN
Covid-19 has shown that women are more likely to face the brunt of job losses than men, and find fewer opportunities when they want to resume. That apart, several have to deal with increased hours of unpaid work at home and even domestic abuse
LEADERSHIP WILL BE ABOUT SEEING THE BIGGER PICTURE
Leaders must not only guard their teams first during a crisis, but also deal with stakeholders with respect and dignity. And apart from pursuing business goals, they should remain committed to our planet and the environment
PHILANTHROPY SHOULD BE HUMBLE, BUT NOT MODEST
Apart from building a flexible and resilient framework for the future, philanthropists, civil society and the government must work in tandem so that every rupee is absorbed on the ground
INTEGRATED HEALTH CARE, TECH WILL DISRUPT SECTOR
While clinical research will get a boost, having a skilled workforce and public spending on health care will be challenges in the near term
DIGITALISATION WILL HELP IN VALUE CREATION
As the pandemic brings technology and innovation to the core of business and daily life, the next decade will see about 150 million digital-first families in India
Industry 4.0: Climate Revolution?
Augmenting sustainability alongside digital capabilities is an economic, competitive and global opportunity for India’s businesses, but regulations need to reflect intent
EV Dream Still Miles Away
Electric vehicles have remained a buzzword in India for years. But not much has moved on ground due to high upfront costs, range anxiety and charging infrastructure
Living Waters
A virus has caused us to scramble for oxygen but our chokehold on the environment is slowly strangling the very waters that breathe life into us. The virus is a timely reminder: We are merely consumers, not producers of life’s breath on this planet