What do leaders do?
The comic strip below shows what leaders generally do & get away with it because of their power or personality:
Credits: Dilbert Comic Strip
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Making Board of Directors work for the entrepreneur
I, personally, feel that the founder / entrepreneur should exit their company’s day to day operations after it comes to a certain stage. It would be difficult for any company to grow out of its founders shadows / strengths and actually reach its full potential.
I was doing research on how Board of Directors can be constituted & prepared this notes, which i thought would be of interest to all Entrepreneurs, especially, for the founders who are conscious of CEO’s accountability.
There are three sets of principal/agent problems which are inherent in the structure of large companies:
- Those arising between management and the shareholders as a class;
- Between majority shareholders and minority shareholders;
- Between the controllers of the company (whether managers or majority shareholders) and non-shareholder stakeholders.
Formation of Board of Directors is a mechanism to solve them, if they are well chosen and work effectively.
Type of Board Compositions by popularity:
- Majority Outsiders and CEO as Chairman
- Majority Outsiders & Independent / Non-Executive Chairman - Leads to Board Leadership
- Majority Insiders and CEO as Chairman
- Majority Insiders and Independent / Non-Executive Chairman
Just formation of the Board is not enough, we have to align their interests with shareholders. Also, the management should also be aligned with shareholders interest. There are two methods to do it:
- Requiring officers and directors to own substantial blocks of the corporation’s stock;
- Increasing the extent to which officer and director compensation is contingent upon performance measures that reflect increased shareholder value.
References Used:
- Board of Directors: Composition, Meeting and Committee
- Corporate governance: fact or fiction? - composition of board of directors
- Free Complete Toolkit for Boards
- The Board of Directors: Composition, Structure, Duties and Powers
- 10 “STOP” Signs on the Road to Board Recruitment
- Compensation for Board Members
Please share your opinion on this?
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Two instances which tell India is an emerging Super Power
India is an emerging super power and i firmly believe in it.
I found two more instances which confirm it.
First instance, I was having a discussion with one of our content developers and he is writing a paper on Indian Philosophy to be presented at an International Convention. He was saying, historically, all indian philosophy was in sanskrit and that too in profound words which a layman could not understand. Something like “Aham Brahma” which is profound but rarely unnderstood by laymen like me.
He said, his life amibition is to give explanantions to such expressions and make it understandable to billions of people.
There are scores of people who believe this and a slow, steady and untold revolution is happening. Look at the two websites which list indian bloggers Indian Blog Awards & Indian Bloggers List.
It is amazing how many of them have adopted blogging as a means to reach out to the world.
Second instance, I was watching NDTV program on “Professionals coming into politics“. It is really heartening to see them talking about change in Indian Politics. Three professionals really standout.
1) India head of ABN Amro bank Meera Sanyal (to contest elections from South Mumbai constituency as an independent candidate).
2) An activist, dancer, an MBA Mallika Sarabhai ( has taken the plunge into the rough and tumble of politics as an independent politician)
3) Shashi Tharoor, a writer and former U.N. under-secretary general (Rolling up his sleeves to contest as Congress candidate from Thiruvananthapuram)
Whether they win or not, they would give confidence to lot more professionals to jump into the political band wagon. This would lead to more accountability & growth oriented policies.
What’s your opinion?
How do you see India changing and emerging?
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