What triggered you authors to do the empirical study and bring out the book on Role of Boards?
AB Boards have a vital role in the life of companies and this book is meant to be a timely reminder about this fact. The following facts triggered us to work on this topic :
India has to absorb more than 12 million people of working age every year, else the demographic dividend will turn into a gigantic disaster. The golden age of India's economic growth is gone. India's global ranking of India on Ease of Doing Business is rather low especially when we are seeking to become a manufacturing hub for the world. Attracting investments into a country is a challenge and one of the important factors that it rests on is Trust. The corporate scams and scandals which regularly pop up on the business horizon in India are - among other factors - contributing to the trust deficit among investors regarding Indian businesses and implementation of corporate laws.
The pandemic may have given India yet another window of opportunity to attract more investors to set up business. COVID is changing the game by creating a level playing field for all nations. New opportunities are evident in healthcare, pharma, products made with new age materials and so on, which can protect people from the pandemic. Changes are required both at the national level and at the company level.
Company Boards have an important role not only in building trust but also in making businesses competitive and proactively taking advantage of available opportunities to grow the business. Boards must move beyond playing the compliance role to giving greater focus on organisational performance.
AB The book has been pioneering in shining the lighton various issues afflicting Indian Board-issues relating to composition, competence, agenda, decision making and attention to strategic matters. The book is unique in that it has gathered empirical data on behavioural aspects of Boards from Board directors - composition, focus, capability, meetings quality, role played by Independent directors and Chairman. Findings indicate that Board functioning is mostly inadequate. An important reason for this is the compliance role being played by Boards and that is not enough any longer. Indian Boards have a long way to go in ensuring effective Governance.
Boards are at the helm of organisations and have a critical role to play in chartering the long-term growth and sustained excellence of the organisation. This book passionately builds the business case for Boards to play a strategic role in preparing the organisation for the future.
The book has refocussed the purpose of organisations : wealth creation, stakeholders, and planet. The authors have positioned the organisation as a nationalistic entity with moral concerns, committed to economic growth, inclusive development, shared prosperity and social renaissance. The authors have also raised significant questions on the purpose and sustainability of the capitalist model. Their stand is unambiguously clear : corporates needs to have a soul. It is this higher order principle which can inextricably link human survival, social progress, corporate excellence and national development.
The book gives many data-based suggestions on how companies can set right Board room governance. The suggestions range from competencies needed to be effective directors, to type of roles to be played by Chairman and Independent directors.
After examining where Indian Boards lag, the book goes on to recommend that Boards need to pursue a strategy of continuous innovation and not just innovation to ensure survival, growth and sustained high performance. It makes a clear business case as to why Boards need to re-examine their roles and play their roles for building organisational growth and competitiveness.
Dr. Pritam Singh, the first author has been known for successfully architecting several academic institutions and carrying them to commanding heights. As consultants to the various Boards in both public and private sector, he has charioted several organisations on their transformational journey. He and Dr. Bhandarker, have conducted top management level workshops for so many years and made huge contributions to myriad organisations. In closing, it would be appropriate to say that Boards need to play the role of Krishna and be the friend, philosopher and guide to the company management so that they can single mindedly pursue organisational goals.
According your study, what factors make Indian business boards distinct and more competitive from others?
AB The biggest advantage enjoyed by Indian boards is that large Boards are compliant and follow the rule of law. India has some truly high-quality Boards built on the principles of good governance, performance and growth. However, there are a multitude of organisations which do not measure up. That's why this is such an important book on flagging the issues and raising questions.
Dr. Asha Bhandarker