New Corporate Governance Guidelines for Startups From CII
The Confederation of Indian Industry (CII) has introduced new corporate governance guidelines tailored specifically for startups. These guidelines aim to enhance governance practices and provide tailored suggestions suitable for various stages of a startup’s lifecycle.
Included in the charter is an online self-assessment tool that startups can utilise to evaluate their current governance status and track improvements over time. This tool enables startups to gauge their progress in governance, with score adjustments indicating advancements in governance practices as evaluated against the scorecard periodically.
The guidance offered to startups will be structured across four key stages: inception, progression, growth, and going public. Each stage emphasises specific governance principles that may require heightened attention during that phase of the startup journey.
This initiative comes amidst growing concerns over governance standards raised by startups such as Byju’s, BharatPe, GoMechanic, Groyyo, Mojocare, and Zilingo in the past 12–18 months. Recognising the importance of robust corporate governance, Kunal Bahl, chairman of the CII National Startup Council, emphasised that while startups thrive on innovation and rapid growth, good governance enhances decision-making quality and fosters long-term strategic thinking.
Chandrajit Banerjee, Director-General of CII, highlighted that the charter encompasses key focus areas for startup governance and introduces innovative concepts to elevate overall governance standards in the Indian startup ecosystem. Amitabh Kant, India’s G20 sherpa, stressed the significance of good governance practices for startups’ evolution into successful large companies, emphasising the need for proper audits and competent chief financial officers (CFOs). Over the past year, there has been a noticeable trend among early and mid-stage startups in hiring CFOs, driven by increasing investor demands for adequate financial controls across portfolio firms.
