Good governance crucial than highest market cap for startups: Industry leaders
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.
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.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Senior Citizen Latest FD Rates: Know what major banks like SBI, PNB, Canara Bank, HDFC Bank, ICICI Bank are providing on fixed deposits
Gratuity Calculator: Rs 38,000 as last-drawn basic salary, 5 years and 5 months of service; what will be gratuity amount?
Retirement Planning: In how many years your Rs 25K monthly SIP investment will grow to Rs 8.8 cr | See calculations
Top 5 Small Cap Mutual Funds with best SIP returns in 1 year: See how Rs 25,000 monthly investment has grown in each scheme
Top 7 SBI Mutual Funds With Best SIP Returns in 1 Year: Rs 25,000 monthly SIP investment in No.1 fund has jumped to Rs 3,58,404
Top 7 Mid Cap Mutual Funds With up to 41% SIP Returns in 5 Years: No 1 fund has converted Rs 15,000 monthly investment into Rs 23,84,990
SBI 5-Year FD vs MIS: Which can offer higher returns on a Rs 2,00,000 investment over 5 years? See calculations
10:31 AM IST