India’s start-ups urged to focus on getting corporate governance right

Start-ups in India must set new standards in corporate governance and financial management, leaving no room for lapses on this front, the former chief of a leading government think tank has said.

Amitabh Kant, a former NITI Aayog Chief Executive, described start-ups as “national assets”, saying India should be aiming to become the world’s leading nation when it came to start-up organisations. Currently, India has the third largest start-ups ecosystem in the world with nearly 120,000 registered start-ups.

Kant said: “Corporate governance is key. If there is no corporate governance, government and regulators will step in. This is a reflection point for start-ups.” Speaking at the first-ever ‘Startup Mahakumbh’, held in New Delhi, he said that the onus is on start-ups in India to build trust rather than just look at the bottom line and profit, which he said leads to poor governance.

He warned: “There should be no lapses. Start-ups must adhere to a self-regulating ecosystem with a governance framework, and this will bring in transparency and ethical behaviour.

“If you want to create a vibrant start-up movement, there should be no government intervention and there should be no regulator intervention. You all know that government and regulator stifle innovation. You must understand that innovation is always ahead of regulation,” Kant added.

Kant also said that during the G20 Summit hosted last year under Indian Presidency, the Startup20 made a recommendation on corporate governance for start-ups. “My suggestion to all of you is just adopt it as bible in addition to following other rules and regulations,” he said.

Startup20 is a platform for entrepreneurship and innovation leaders from the G20 countries to collaborate and formulate policy recommendations to support the development of start-up ecosystems.

It aims to bridge the knowledge gap between the G20 countries and emerging economies and establish a Global Innovation Centre to encourage cross-border collaborations.

 

Sustainability goes hand-in-hand with growth, new study finds

Indian enterprises stand to add substantial value to their organisations by improving their sustainability strategies, a new global study by the IBM Institute for Business Value (IBV) has revealed.

The study, titled ‘Beyond checking the box’, concluded that by focusing on sustainability companies stand to unlock considerable business value. The study emphasizes the importance of businesses embedding sustainability into all facets of their operations, as opposed to treating it as an optional addition.

The report said organisations in India that embed sustainability are 41% more likely to see improvements in revenue and are 90% more likely to outperform their peers on profitability. The study further found that spending on sustainability reporting exceeds spending on sustainability innovation by 38% in India, indicating demand for solutions that facilitate efficient data management and reporting.

Embedding sustainability into all operations will bridge intent-impact gap for long-term value creation in business.

“In today’s business world, sustainability has evolved from being optional to indispensable. With AI reshaping industries, integrating sustainability into core business practices add to the long-term value creation. The commitment of businesses to invest in Gen AI for sustainability signals a promising move towards a greener, more prosperous future,” said Sandip Patel, Managing Director, IBM India Private Limited.

“This study not only underscores the environmental responsibility of enterprises but also highlights their readiness to leverage cutting-edge technology for lasting impact and competitiveness.”

The study found that:

• In India, 78% executives surveyed agree that sustainability drives better business results, and 68% agree that sustainability is central to their business strategy.
• At the same time, 62% say that sustainability needs to be a higher priority in their organization.
• 86% of executive respondents agree that high-quality data and transparency are necessary to achieve sustainability outcomes.
• A lack of requisite skills was identified as the top barrier to sustainability progress by 44% executives.
• 63% of executives surveyed agree that generative AI will be important for their sustainability efforts.
• 76% say they plan to increase their investment in generative AI for sustainability.
• Only 28% of Indian executives surveyed are incorporating sustainability data and insights into operational improvements to a great extent.
• Almost half (47%) of Indian organisations still struggle to fund sustainability investments.
• 53% of these organizations globally say that business benefits are essential for justifying sustainability investments; only 17% say meeting sustainability objectives is sufficient to justify investment.