2023 was about scandals involving BYJU’S, BharatPe, GoMechanic and a couple of more companies while 2024 brought new controversies that left investors as well as the public questioning governance practices in the industry.
MapmyIndia CEO Rohan Verma announced this year to step down in favour of starting a new B2C venture and it seemed like an exciting development. The separation raised eyebrows Verma planned to hold a 90% stake in the new company and MapmyIndia retained just 10%. The new venture was set to take over critical assets like the Mappls app and left MapmyIndia with limited access to its own data. Investors were understandably upset and share price of the company price took a nosedive. Verma later promised to fund the venture himself, but by then the damage to investor trust was already done.
Distributors of Mamaearth alleged that its mother company Honasa Consumer were saddled with INR 300 crore worth of unsold inventory nearing expiry and this caused them financial losses.
The incidents highlight a recurring theme and it is governance gaps.
The Confederation of Indian Industry (CII) introduced a governance charter this year to address the issues. It is a promising step and of course implementation will be the key. Strong governance is not just a box to tick, but it is required for maintaining investor confidence and long-term growth.
It is time for founders to prioritize governance as much as growth because the two are deeply interconnected.
