CII releases corporate governance model for start-ups

The Confederation of Indian Industry (CII) has come up with a corporate government charter for start-ups to serve as a selfgoverning code in their compliance journey.

The charter, which startups may follow on a best-endeavour basis, is aimed at helping them become responsible corporate citizens.

READY RECKONER

The charter is intended to be used by start-ups as a “ready reckoner” as they glide along the path of good governance, CII said. The charter has been curated to guide start-ups during their life cycle segregated into four stages: inception, progression, growth and going public. During each stage, governance tenets that may additionally be focused on have been identified.

VALUE CREATION

R Dinesh, President, CII & Chairman, TVS Supply Chain Solution, said early adoption of good governance practices helps start-ups gain tangible and intangible benefits, including long-term value creation, stakeholders’ trust, better access to finance from investors and banks, reduced reliance on promoters, e¢ective organisational structures and improved chances of long-term survival of the business.

STAGES TO GROWTH

In the ‘inception’ stage, start-up governance may be focussed on board formation, setting the tone-at the top, compliance monitoring, accounting, finance, external audit, policies for related party transactions and conflict resolution mechanism.

At the ‘progression’ stage, a start-up may additionally focus on the expansion of board oversight, monitoring key business metrics etc.

In the ‘growth’ stage, it may also focus on building stakeholder awareness.

At the ‘going public’ stage, start-ups may expand their governance in terms of monitoring of functioning of various committees, focusing on fraud prevention and detection, grievance redressal mechanism etc.