Good governance crucial than highest market cap for startups: Industry leaders


New Delhi, March 20 (IANS): As certain Indian digital companies like Byju’s, with a mammoth $22 billion valuation once, get embroiled in corporate governance issues, top industry leaders have said that running a clean company with honest practices and good governance is more important than having the highest market cap.

In a conversation with Kunal Shah, founder of fintech major CRED, veteran investor and Info Edge Founder Sanjeev Bikhchandani said that the leader’s role is not to sell stock but to ensure that when somebody else wants to sell their stock, there are enough buyers.

“A leader needs to build the company for all shareholders, and ensure everyone gets rich, not just themselves,” he told Shah on the latest episode of “CRED curious”.

Founders need to create trust across the table with co-founders, colleagues and shareholders.

“The principles of trust are integrity, consistency, competence, benevolence; the presence of all doesn't guarantee trust, but the absence of any creates mistrust,” said Shah.

According to them, one person’s error impacts the entire ecosystem.

“In 10 years, there will be many more profitable and large Indian internet companies. We are all ecosystem participants and every error of competence, judgement, behaviour impacts us all,” the industry veterans argued.

“Running a clean company with honest practices and good governance is therefore more important than having the highest market cap," they stressed.

Bhikchandani advised founders to go public only when their profit streams are sufficient to support this, while Shah suggested that companies should go public only when they’ve run eight quarters like a public company.

  

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Title: Good governance crucial than highest market cap for startups: Industry leaders



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