B-schools will train startup investors – Gudstory

The Indian School of Business (ISB) and the Indian Institute of Management (IIM) have designed courses to meet the needs of professionals appointed by private capital funds to oversee early growth stage companies.

Nearly 7,500 listed and over 20,000 unlisted companies will reform their boards in March when the Companies Act 2013 completes a decade. As a result of this change, approximately 30,000 independent directors will retire after completing two terms, in line with the provisions of the law. Amidst the growing economy and complexities of new-age businesses, a board with directors who can champion implementing best corporate governance practices is crucial for young companies.

Recent examples of corporate governance lapses in large startups have also underlined the need to strengthen measures to protect investors’ capital.

“Securing such risky investments is a challenge, and it is key to determining the growth of the private capital market in India,” said Karthik Reddy, co-founder of Bloom Ventures and president of The Indian Venture and Alternative Capital Association (IVCA). Will happen.” ,

IVCA, in partnership with ISB’s Center for Business Innovation, launched one such training program for PE and VC fund managers last month.

“This program is designed to meet the needs of professionals appointed by private capital funds to the boards of early growth stage companies. It strives to strike an optimal balance between theory, practice and real-world experience to help participants better understand the economic drivers of business performance and valuation by enhancing strategic thinking and critical analysis.” A joint release The program is sponsored by venture capital and private equity funds such as Accel, Ascent, Catamaran, Peak XV Ventures, Ski-Capital, T-Hub and TMF Group.

Reji George Palathitta, professor at IIM Bangalore, said board functioning is an important focus area in the B-school’s program on corporate governance.

In addition to its flagship two-year MBA programme, IIM Bangalore offers a Post Graduate Program in Enterprise Management (PGPEM) and an Executive Post Graduate Program in Management (EPGP). For both PGPEM and EPGP, Corporate Governance and Ethics is a compulsory paper. This involves the B-school connecting with participants in family business executive programs and some industry-specific programs to discuss issues facing startups and their boards in the classroom. “NSRCEL puts a special focus on startups and their boards in its programs and courses,” said Pallathitta. NSRCEL is the business incubator of IIM Bangalore.

There are increasing cases of board members and investors demanding forensic audits and taking action against founders over alleged lapses in corporate governance and fraud. There are growing concerns that if these startups close down, private capital will be in danger.

In some cases, such as Byju’s, the country’s most valuable startup, three board members resigned in June, alleging that corporate governance at the company had not evolved in line with the growth it had seen.

Anish Sugathan, associate professor of strategy at IIM Ahmedabad, said IIM Ahmedabad, at advanced levels, also offers specialized corporate governance courses that comprehensively explore the various dimensions of the board’s functions and responsibilities.

“The emphasis on startups and their boards is a relatively recent and emerging area of ​​interest. Although we do not have any dedicated course on governance of startups, at IIMA, we provide training to students on compliance and ethical responsibilities for startup founders with respect to their investors and consumers,” he said.

Educational institutions, especially B-schools, play an important role in this scenario, offering courses focused on board management to equip future leaders with the skills required to navigate these evolving dynamics, in Effectively promote strategic decision making and adaptability in leading boards. Director of IIM Indore, Prof. Himanshu Rai said, the environment is changing rapidly.

At IIM Indore, several optional courses on board management and executive education programs are offered. These executive programs cover a spectrum of areas essential to strategic decision making, organizational leadership, and boardroom effectiveness.

“Industries are undergoing significant changes due to technological advancements and changes in consumer behaviour, which require agile governance structures. Furthermore, the COVID-19 pandemic intensified the need for quick decision-making and adaptive strategies, underscoring the critical role of board governance in times of crisis. The emerging startup ecosystem has further emphasized the importance of effective board management in attracting investment and guiding the trajectory of these ventures. Boards are experiencing a shift toward more diverse structures, recognizing the importance of diverse expertise and inclusive decision-making, Rai said.

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Updated: 07 November 2023, 11:31 PM IST