By Srinath Sridharan
A renowned business leader recently extolled the virtues of his community which has had much success with entrepreneurship. In an era where diversity and inclusion are as important as meritocracy, where does corporate governance stand? Does this mean that India Inc still cares about where one is from (caste, community, creed) than what one brings to the table?
The legacy of community-based economic achievements should be acknowledged, but not necessarily be made into some sort of playbook. The achievements of a community should not overshadow the principle of meritocracy or equal opportunities, which should underpin all entrepreneurial endeavours. It is a double-edged sword. While such public utterings garner accolades from like-minded individuals, it raises concerns about the erosion of meritocracy. No community has monopoly on Indian businesses.
It is imperative to emphasise that when a respected industrialist chooses to write about a particular community, it runs contrary to the principles of corporate governance. Promoting the cause of any one community can inadvertently give rise to concerns of bias and discrimination, thereby undermining the principles of equity and inclusivity that modern businesses are expected to uphold.
While every individual has the right to express their opinion freely, it is equally important for leaders of listed entities and industry thought-leaders to exercise discretion in public utterances. Such individuals carry substantial influence and their words carry significant weight. When they venture into discussing communities, it can be easily misinterpreted, leading to unintended consequences and reinforcing perceptions of favouritism or division.
The actions taken and statements made by leaders set the tone and expectations for their company’s conduct. The public image and reputation of a business are intricately linked to the behaviour of its leaders. Hence, it is essential for business leaders to exercise discretion, ensuring that their actions align with the principles of fairness, equity, and corporate responsibility.
In today’s age of urgency to bring diversity to the corporate world and the Indian corporate sector’s continued struggles to meet such a requirement, it is imperative to dispel the notion that any particular community or caste holds the exclusive keys to the business success. India, a country where surnames and lineage once held the power to secure approvals during the License Raj era, needs to reflect on whether this legacy still lingers, despite the supposed democratisation of entrepreneurship.
Does the familiarity of or comfort from their own communities make Corporate India leaders more biased towards such people in certain roles in their businesses? Does it mean that decision-making or influence in their organisations would be led only by people from those communities? Isn’t it worrisome that in many of the reputed business families, their women are not allowed to take executive roles in their companies, all in the name of community or family rule?
Anectodally, one can witness that community-based partnerships persist in Indian business. The influence of marriage and bloodlines in shaping business collaborations or mergers and acquisitions cannot be ignored. It’s striking that a substantial proportion of Indian entities, including approximately two-thirds of the top 500 listed entities, are under the control of business families.
While these families play pivotal roles in India’s economic growth, there is a need to critically examine the extent to which these affiliations and personal beliefs continue to drive business and governance decisions. Does it mean such traditional (community) connections are misaligned with modern business imperatives that prioritise meritocracy, innovation, and strategic vision?
Family businesses often find their roots in cultural values and community principles, which can provide them with a strong and enduring foundation. However, in the modern business landscape of corporate governance and the increasing expectations for equitable treatment of all stakeholders, including employees, vendors, associates, shareholders, and regulators, it becomes paramount that there is no room for bias based on the community or caste to which the business promoters belong.
Recent achievements in Indian sports, ranging from individual events like athletics and javelin-throw to team sports like cricket and hockey, have reaffirmed that merit matters, and the rest doesn’t. Where you come from does not dictate your destiny. In sports, caste, creed, or community does not matter. Talent is important. The Indian cricket team of today is a big example—one can see the shift from the 1980s grip of the talented Mumbai camp on Indian cricket to today’s sheer diversified talent with no godfathers.
Our nation’s independence was founded on the principle of no discrimination based on caste, creed, or community. Yet, the persistence of a hierarchy rooted in perceived community bias calls into question our commitment to meritocracy. Modern Indian businesses must recognise that meritocracy, free from any -isms, except for clean governance, is essential for their growth and sustainability. The core of governance is good behaviour, despite who owns how much.
Dynastic enterprises are increasingly finding themselves challenged by the dynamism and innovation of modern startups, and the evolution that corporate governance needs. The sustenance of legacy businesses in the present era hinges not on traditional precedents or prejudices but on their capacity to adapt, innovate, and align with the demands of a changing world. It is time to break free from the shackles of community favouritism, caste associations, or creed affiliations. Instead, businesses should prioritise character, clarity of thought, and a strong value system. After all, there are no exclusive rights that anyone or any community has over these fundamental human traits.
The future belongs to those who can transcend the boundaries of legacy and usher in a new era of entrepreneurship defined by a commitment to merit and progress. The core values that should define us are fairness, equality, and meritocracy. We need to mean meritocracy than just celebrate community. That’s why success should be about creating a name for oneself, not depending on surnames.
The author is a corporate advisor and policy researcher.
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