Startups should cultivate a spirit of custodianship
At a time when new-age firms like Byju’s are facing governance issues, the Confederation of Indian Industry has come out with a Corporate Governance Charter for Startups. As per CII, “Startups, being an important constituent of the Indian business ecosystem, will gain immensely from the charter, which will help them build trust of stakeholders and investors”.
The charter requires startups to cultivate a spirit of custodianship and fiduciary responsibility as in a listed company as soon as a non-founder equity infusion occurs. The charter also requires companies to identify and draft the entity’s vision, mission, code of conduct, ethics, values, and culture. The perception that good corporate governance involves excessive cost and makes startups less agile may be misplaced. It is important that corporate governance measures are not viewed as a cost centre for business since the cost of non-compliance and misgovernance can be fatal to the business.
