B-schools to train startup investors

Board members and investors calling for forensic audits of alleged corporate governance lapses is rising

- Sneha Shah & Devina Sengupta

Growing risks for private equity and venture capital (PE and VC) investors and the rising complexity of business models have prompted top Indian business schools to focus on training fund managers and board members on the nuances of effective startup governance.

The Indian School of Business (ISB) and the Indian Institutes of Management (IIMs) have prepared courses to meet the requirements of professionals appointed by private capital funds to oversee early to growth stage companies.

Almost 7,500 listed and more than 20,000 unlisted companies will revamp their boards in March when the Companies Act of 2013 completes a decade. This transition will result in approximately 30,000 independent directors retiring after completing two terms, in line with the provisions of the law. Amid a growing economy and complexities of new-age businesses, a board comprising directors who can champion implementing the best corporate governance practices is crucial for young companies.

Recent instances of corporate governance lapses at large startups have also underscored the need to shore up measures to safeguard investors’ capital.