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We have had a very comprehensive discussion,
we have talked about the early inception of ELGi,
we talked about geneses of aspiration.
How strategy fits into aspiration,
leadership and talent in the context of what we want to achieve
then finally our brand and our values.
All of these culminate into us establishing an institution
but as part of the promoter group,
how do we sustain the institution over a time,
well an institution by your definition has sustenance but,
today you are a strong personality in the company
and arguably driving a lot of the change.
What is governance and ownership look like in the future
or what should governance and ownership look like in the future?
and what are some models we have to aspire to?
you’re absolutely right,
I mean, you know, human life is finite
and finite human lives should combine together
to create an infinite institution, yeah?
Now how do you do that
because if you allow mavericks during their finite lifetime can destroy institutions, right?
so the governance structure of the company is very important.
Now what I found or my theory is good governance is a tripod.
It has three strong legs
1) is the management of the company.
They should be given the freedom, to explore, mitigated carefully managed risks.
then there should be promoters with skin in the game,
as integral part of the governance structure
because there are enough examples of companies
that had great management
but nobody with skin in the game in the governance structure,
so they went hay wire.
The inherent behavior of people with skin in the game
namely the promoters are in the governance structure.
Their behavior is risk averseness,
so you have management and owners
with causing that tension, right?
Between risk and risk averseness,
then the third leg are the critical leg of independent directors
who manage this tension triangle, yeah?
So it becomes tied tightly therefore it brings stability to the institution, right?
and it becomes a productive relation.
it’s a productive relation because each one brings a perspective
and there is tension which is constructive tension
but they are tied together and because it’s three legs they got stability, right?
Two is unstable and they are all tightly held together
and that’s really the ideal philosophy of governance
but to actually execute it is a lot of work.