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SH. GEORGE ALEXANDER MUTHOOT ADDRESSING THE GATHERING IN THE INDIAN BUSINESS CONFERENCE
On April 20th, The Indian Express New York covered Sh. George Alexander Muthoot’s address on ‘Corporate governance and transformation from a family owned business to a public enterprise’ to the gathering at the Indian Business Conference held at Columbia Business School.
Sh. George Alexander Muthoot elaborated on the topic by explaining the benefits of sound Corporate Governance in family businesses by citing examples of various Indian and International family businesses that have benefited by corporate governance and grown in their respective industries. His speech talked about the stats that prove that in USA, around 5.5 million family businesses contribute to 57% of the GDP of the Country and employ 63% of the Country’s workforce. Few examples of such giants are Wal-Mart, Ford, Carrefour, BMW, Samsung & Motorola.
He talked about his family business, Muthoot Finance Ltd., which is an NBFC that extends credit against the security of Gold mainly to households and small businesses. He took the gathering through the journey of the Company and how through continuous efforts, they have extended their presence to areas where access to organized credit facilities were limited or nil. Even though there are quite a few techies and young entrepreneurs using the Company’s services, as a lender to the common man, it is essential that the Company remain continually sensitive to their changing needs and plan how best to secure the interests of shareholders, customers, employees and host community without jeopardizing any party’s interests. He declared that the best tool at their disposal for securing sound business practices to achieve these ends is Corporate Governance.
He also mentioned that Innovation at any dynamic organization is a daily affair, and Corporate Governance is a facilitating factor in achieving this. Corporate mis-governance on the other hand, has resulted in the failure of large companies across the world. Unless the corporates are themselves focused on ensuring good governance, no regulator can assure the compliance of this in spirit. Only consistently good governance can build a credible brand and earn good valuation in the stock market. Sustained growth can only be nurtured in an atmosphere of trust among the stake holders which can only be ensured through sound corporate governance.
He said that corporate governance in family businesses helps them to invite investment and talent, decide on right roles, evaluate performance & strategies, assure objectivity, continuity and fair play while ensuring stakeholders’ interests and also help in effective succession planning. This adds values to the business and also maintains family harmony.
He concluded by saying that ultimately, the governance norms set by Family or Public companies have to be evaluated against its efficacy in achieving its objectives. If the norms facilitate the Board to achieve corporate objectives, the company has sound governance policies but otherwise, the organization must introspect on the necessity for change and bring in better practices.
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