In a rapidly evolving business landscape, characterized by the burgeoning startup ecosystem and the complexities of modern enterprises, leading Indian business schools are stepping up to the plate. They are launching specialized courses and training programs aimed at equipping professionals with the knowledge and skills needed to navigate the nuances of startup governance effectively. These initiatives come in response to the growing risks faced by private equity and venture capital (PE and VC) investors, as well as the pressing need for robust corporate governance practices.
Indian Business Schools Respond to Market Dynamics
The Indian School of Business (ISB) and the Indian Institutes of Management (IIMs) are at the forefront of this educational transformation. They have introduced tailored courses designed to meet the specific requirements of professionals appointed by private capital funds to oversee early to growth-stage companies. As the Companies Act of 2013 completes its first decade, nearly 7,500 listed and over 20,000 unlisted companies are poised to revamp their boards in March. This transition will result in approximately 30,000 independent directors retiring after completing two terms, in accordance with legal provisions.
The Imperative for Effective Governance
In a dynamic economic environment, the composition of startup boards has become crucial. Boards comprising directors well-versed in championing the best corporate governance practices are vital for the success of young companies. Recent instances of corporate governance lapses at large startups have underscored the need for robust measures to safeguard investors’ capital. It’s a challenge that Karthik Reddy, co-founder of Blume Ventures and chairperson of The Indian Venture and Alternate Capital Association (IVCA), recognizes as pivotal for the progress of the private capital market in India.
A Collaborative Approach to Training
IVCA, in partnership with ISB’s Centre for Business Innovation, recently launched a comprehensive training program for PE and VC fund managers. This initiative aims to address the specific needs of professionals appointed by private capital funds to serve on the boards of early to growth-stage companies. It blends theory, practical insights, and real-world experiences to enhance participants’ understanding of the economic drivers of business performance and valuation. Notably, the program is sponsored by prominent venture capital and private equity funds, including Accel, Ascent, Catamaran, Peak XV Ventures, Ski-Capital, T-Hub, and TMF Group.
Leading B-Schools Stepping Up
IIM Bangalore, known for its strong emphasis on corporate governance, includes board functioning as a pivotal focus area within its curriculum. Besides its flagship two-year MBA program, IIM Bangalore offers a Post Graduate Programme in Enterprise Management (PGPEM) and an Executive Post Graduate Programme in Management (EPGP), both featuring a compulsory course on Corporate Governance and Ethics. These programs engage with participants in family business executive programs and industry-specific courses, providing a platform to discuss issues related to startups and their boards.
IIM Ahmedabad, at more advanced levels, offers specialized corporate governance courses that comprehensively explore various dimensions of board functions and responsibilities. Anish Sugathan, associate professor of strategy at IIM Ahmedabad, points out that while the emphasis on startups and their boards is relatively recent, the institution provides training to students on compliance and ethical responsibilities for startup founders in relation to their investors and consumers.
The Role of B-Schools in Shaping Governance
Educational institutions, especially business schools, play a pivotal role in this evolving landscape. Their courses and programs focused on board management aim to equip future leaders with the skills necessary to navigate the changing dynamics of corporate governance. They foster strategic decision-making and adaptability, essential attributes for effectively leading boards in today’s rapidly changing environment. Prof. Himanshu Rai, director of IIM Indore, highlights that industries are undergoing significant transformations driven by technological advancements and shifting consumer behaviors. These changes necessitate agile governance structures, and the COVID-19 pandemic has accelerated the need for swift decision-making and adaptive strategies, underlining the pivotal role of board governance during crises.
Meeting Industry Needs
At IIM Indore, several elective courses and executive education programs on board management are offered, covering a spectrum of areas essential for strategic decision-making, organizational leadership, and boardroom effectiveness.
