By paying attention to corporate governance, you can lay the foundations to build a strong company culture in the years to come.
- Publish audited financials even if nobody requires you to. There are two reasons to do this – one is to reassure your customers and investors that all is well in your company. The other is to build the habit of transparency and openness you will need to build the organization for the future. At Persistent Systems, Anand began publishing audited financial reports long before he was required to, for both reasons cited here.
- Create a Board even if company law doesn’t require you to. As CEO and founder, you may be accountable to nobody. It is a heady feeling, but also dangerous if you want to build a lasting legacy. Having a Board to report to, will make you accountable to someone. Of course, you should be the Board Chair, we are not suggesting you give up control – but you should have a Board and hold Board meetings regularly and seriously – none of this ‘shall we proceed for lunch’ kind of Board meeting.
- Think of your responsibility to the community from day 1 – Persistent began a CSR operation long before the government mandated it. The CSR should be real and serious, not just giving money to your old school!
Frequently Asked Questions:
Q: What kind of people do I want on my Board?
A: The kind of people who can be a good sounding board – sometimes it is good enough just to have someone you can speak out your heart to – they dont even have to tell you anything – the act of telling them about it will suggest solutions to you, clarify your thoughts.
Q: Do they need to be experts on something?
A: perhaps it helps if someone is an expert on Finance, on Marketing, Operations, whatever – then they can give you specialized advice when you need it. But a company’s issues seldom fall into neat buckets, so Directors shoudl be able to see the forest for the trees. Having a Board member who goes to sleep and wakes up just when his or her topic is being discussed, is not the kind you want.
Q: But who will agree to be on my Board? I am not exactly Infosys!
A: You would be surprised. Very few people would refuse to help you if you ask for help. The world is full of people who have accomplished whatever they wanted to in life and wecome the opportunity to help someone else, someone who, perhaps, reminds them of themselves! Never underestimate the desire of people to help. Our advice would be – think about who you want on your Board, find a way to reach him/her, with a credible approach and ask! What is the worst that can happen – he/she can say No! You would be no worse off than you are now. It is true, however, that people currently employed in organizations need to get clearance from their Board to be on your Board, there could be potential conflicts of interest. We have found it easiest to ask someone who is either retired, or is an independent operator, they dont have to ask permission from anyone. Nowadays, having one woman member on the Board is a must – you may as well get one now before it becomes mandatory. Then you can get someone you really want. Avoid tokenism in this – there are enough and more women who can and will contribute as much as any man to the Board, you should not be looking for a ‘token woman’. She will resent it, and so will the others on the Board, which will not help you at all.
Second Orbit 