Leaders, experts and directors claiming highest governance standards are all around us. Many, many years ago, as a college student and then a novice professional, I read with deep passion, every statement of these (purported) tall leaders. Used to swoon over larger-than-life personalities, for their acclaimed leadership wisdom, their ability to coach us (the then young generation), knowledge that they could bestow in upholding the moral compass. “They are all tall in their moral stature” was my belief. “Taller in their ethical and integrity-based lifestyle” was my biased thinking. Every time, the expectation that those popular or frequently covered in the media should be indeed a tall individual. Individuals with ideas, conviction, high ethics and integrity.
That came crashing down as I moved ahead in my corporate journey. One heard of crashes of individual brands. Scandals and gossip would build further sense of disbelief and the question “how does one know the truth about an individual?”
I learnt about bias of many kinds — caste, economic background, schools attended, religion, gender, related by marriage, old boys network, ex-colleagues network, MNC club, affiliation to certain clubs, etc. Then in my career I started interacting with leaders at highest levels — CXOs and board members. Quite a few of them could attribute their positions to (m)any of the above bias! Some of them are present, thanks to ‘affirmative action’. They are there simply because regulations say so. So what, if they are otherwise capability-wise equivalent to any HoD in actual corporate hierarchy or plain and simple: retired and/or available?
Despite these observations, perceptions, gossips and corporate chatter, everything was fine until the actual interactions with them.
One heard of habitual cribbers who would always walk in late to board meetings. “Flight was terrible”. “Food was sickening” (this was domestic business class flight of less than 2 hours)! “Car was parked 100 metres away”. “The PRO did not come into arrivals to fetch me and I had to call him!” One attributed these to their age and the past hierarchical positions the individual held, and take the cribs and jibes.
Well, did they have any relevant points to add in the meetings? Not really.
Did they understand consumers of the business on whose boards they sat? Oh no.
Do they even spend time in meeting key executives or visit the shop floor or talk to key clients as a governance measure or even as a sign of their interest in the company? Nope.
But well, any offsite at an exotic locale might interest many of them to join in, along with spouse in tow. After all, it’s all-expense paid trip — First class at that!
But it’s quid pro quo: the individual takes up the role to get continued access to network, material benefits, and to claim social standing of being “so-and-so” on the board or advisory committee of “so-and-so”. And in return, the company or the promoter could claim that it maintains highest governance standards as people of high repute were on their boards.
Meeting done. Off to cocktails and fine-dine dinner served, either at fancy ‘in fashion’ restaurant in town or at the chairman’s palatial residence. Next day continues with some shopping or spa therapy (all bills taken care of) and flight back home. Sitting fees is just too small to even count in these fashionable directorship-circuit.
Or if it’s a simple need that a fully maintained car and driver are to be provided to someone for their family usage, enough of the company’s administrative creativity can be used. But by then, the chairman has figured the price of your individual ‘claimed’, oops, acclaimed governance norms and the cost of it. Price is what you end up paying if something goes wrong.
Well, if this is what much of Indian promoters saw in past many years or decades, what do any of corporate governance rules mean to them?
Of course, this is not generalising those who are stickler for spirit of corporate governance norms and related behaviour. Or those individuals who add value to the board discussions by asking relevant questions.
A simple litmus test: how many chairpersons or CEOs would be comfortable to have their CXOs and one-downs interact directly and singly with independent directors as part of strategy discussions or understanding company culture, let alone play a part in shaping it?
Do these directors even question the powerful CEO? Or do they simply nod, make pretense of a comment and leave it at that? Do many of them even know the difference of the position of “chairperson of the board” and “chief executive of the company”?
Many of these individuals have great qualifications, pedigree, right network calling card, and professional visibility. Yet they don’t use these for valuable insights to assist the organisation or its stakeholders. Some of these individuals will question minor infractions with deep vengeance and yet not worry about larger ones. In the name of competitive strategy or market necessity.
Do people care about nuts and bolts of the business? Sorry, many do care about the quality of nuts served in the board rooms. Or when the culprits “bolt” away, leaving others facing the wrath and process-pain to clear their names.
The affirmative agenda of inducting certain types of directors also hits a low bar. Some curry favours from or for the entity. Some are simply in awe that they are even a member of a board! Sadly to be in the ‘relevant’ market, they make obeisance to the mighty and the powerful. For the board, it’s a matter of tick-mark that solves for regulatory ask! So in the corporate India journey, let us not hide between narratives that stereotype those affirmative action reasons! Including the gender-veil, or caste-veil. For any of the human values, have nothing to do with specific human strata!
For many, it’s rising to their heights of self-worth. For few, it’s their reward not to be a nuisance value! For few, it’s their public persona and PR value that the firm could use (however obnoxious their personal behaviour and the actual value addition ain’t).
With nepotism, old networks, favouritism, we-use-each-other (currency of such deeds or favours being different), what standards do we expect? The nodding-approach to governance will continue. That’s the dark side of the moon! For outcome of poor governance is indeed letting the companies go to dust!
Corporate governance rules and regulations alone can’t change this. It’s deep human awakening that could positively impact better corporate journey. Yet I still have hope for better corporate governance, in generations to come.