CORPORATE GOVERNANCE BHARATYA ESTYLE

Paytm and Byju two darling start ups, with multi billion dollar valuations, are now in the dumps due to serious governance issues. There are thousands like these. But it's not only startups, corporates here in India work as fiefdoms of the  original promoters, even after they go public or even if they have borrowed from institutions. The promoter is king and  the board members are mostly yes men or women.

 Unethical pratices, siphoning of funds, king style lifestyle and whimsical interference in running the organisation,  is standard practice.  One can find only few exceptions, probably, the Tatas  and, maybe, the IT firms like Infosys etc too. Entitlement culture is  rampant.. They grow, not due to a good strategy or product, but  because:

 a) India has huge potential and untapped demand b) wheeling dealing with govt , financial institutions and regulatory authorities.

c) Political patronage. 

Most shy away from creating world class organisations with impeccable values. Its rare to have professionals   run the organisation. 

A  plyable political class, poor investigative framework available with the  regulators, ineffective judicial system etc are the facilitating factors within which it works.

 A  rich class with unbelievable resources  and   a larger  middle class with investable  funds, both with a lineanent attitude towards unethical practices ( culture issues), keep corporates and stock markets happy.  

It's not that there are saints in the developed world, but there the regulatory and judicial frameworks is good and effective. Its for this reason we have few international organisations investing  here , like they did in China. Whatever comes in is purely due to compulsions of low cost advantages, which is vanishing fast. FDI is highly volatile as funds get parked only for profit booking. 

The way the nation is going now this culture will only worson as Bharat takes over completely.