Alumni Acumen

Alumni Acumen

Corporate governance should drive organizational culture

(Mr Thomas Abraham, K&K Alumni and Partner E&Y)

Organizations are required to transact fairly with all stakeholders including its shareholders, creditors, customers, employees and regulators. Businesses are no longer viewed as providers of goods and services, but as organizations that have a vital role to play in solving humanity’s greatest challenges. Capital (including human capital) constantly shift from organizations that create value only for their shareholders to those that create value in the long term, across a broader group of stakeholders, including employees, consumers, society and shareholders. The history of corporate businesses is littered with organizations which have sought to deceive and profit in the short term, only to be destroyed by its own greed; ruining not only itself but also various stakeholders who have engaged with it. It has consistently been proven that organizations which have placed trust and fairness foremost in its dealings have prospered in the long run and created value for its stakeholders.

Underpinning trust and fairness are the entity’s corporate governance philosophy which sets the ethos and culture of the organization. While each member of the organization is responsible for embodying and reflecting the culture of the entity; the tone and direction is set by those charged with its governance; whether it is the Board of Directors, Trustees or even the Family Board depending on the form and legal structure of the organization.

The Board of Directors is the most common form of governance board, given the prevalent nature of the organization in the business world. In a complex world; it is important that this apex body of governance is staffed with the right level of competence; bringing together specialized knowledge and diversity to ensure that the organization is guided appropriately. It is even more important that Directors are people of integrity and ethics; with sufficient independence and authority to ensure that they do not function as a rubber stamp of powerful Chief Executive Officers. In several corporate scandals in the recent past; post-mortems have demonstrated that there was minimal understanding of the business by those tasked with its oversight.  Shareholder activist organizations and director trainings have sought to improve the general level of awareness of the Directors of their responsibilities. However, a review of director board compositions across several corporates still produces extensive examples of Directors who have been selected for their acquiescence rather than value to the entity.

In an age when the scale and breadth of information dissemination is instantaneous and global and when a tweet of 280 characters can destroy entities which have taken decades to be built; the importance of corporate governance and the cultural ethos of entities has never been more omnipotent and entities can only ignore this at their own peril. Stakeholders are now able to keep tabs on companies like never. Sustainability and ethical standing are as important as traditional measures of financial strength and market share; as factors that are indelibly tied into investment decision-making.

Regular reviews of the corporate governance framework and how the entity measures itself on the key principles of trust, transparency and accountability must be critically examined. Boards should constantly evaluate if they have ensured that they have effective oversight over the internal controls, performance measurement, accounting integrity and management of the external and internal risks on the organization. Directors should ensure incentive structures that encourage behaviors that fit in with the stated culture. Vital cultural metrics and insights should be collected, reported to and analyzed by the board. These should include various datapoints including social media, employee review sites, turnover rates and exit interview data.

Board members should continuously be questioning themselves on how:

  • The organization is generating and measuring long-term value for multiple stakeholders?
  • Are they re-evaluating executive remuneration to incentivize long-term value creation?
  • What opportunities are they overlooking to redefine the culture the business should aspire to?
  • Were they truly living their business’ culture and purpose? With hindsight what would they do differently?
  • Do they receive reporting on HR and cultural issues from the business? If yes, are they enough to facilitate strategic dialogues and decision-making?
Experts Speak

Experts Speak

The way forward

(Mr Stanley Kunjippalu, Senior Partner, Korah & Korah)

Since December 2019, all that we believed in has taken a tumble. The way forward is not very clear to many. It is indeed time for frank introspection on what is it that was perceived as our goals. What was our vision for the future? What was our mission in life? Both personal and professional. Having done that, we need to sit back and try to understand where is it that we, as a community went wrong. Could we have done what we did any differently? Would we have been in a situation different from that where we find ourselves today, if as a community, we had done things differently? Our mindset has to evolve to visualise and meet the challenges of the future. And for that to happen, it is incumbent on all of us as individuals, as a group, as a community, to creatively visualise what will be the best for all in terms of how we conduct ourselves, how we contribute to the group we belong to and how the groups come together to take the community forward.

We at Korah & Korah believe this to be true. We understand the need to ensure that all those who are with us will need to adapt to the new reality. That they will need to visualise the way forward in the “new environment that is evolving”. We believe that it is our responsibility to assist those connected to us in creating this vision for each of them.

Businesses need to think afresh as to what their “Vision – Mission – Goal” statements are in the changed environment. Some will adapt; many will need to change; a few will slowly die out. New business models will evolve, many a business plan will need to be recreated, visualised afresh and mindsets will have to change certainly. We at Korah & Korah, are therefore working towards ensuring new solutions to our clients, equipping our teams with the know-how required to meet the challenges of the future, to work in virtual environments, to support our clients and associates in their endeavour to meet the challenges of change.

The world around us has changed in the past six months. How it will evolve in the future is rather challenging to comprehend. But what is certain is that most definitely, our attitude to life will need to change. And change big time. Virtual reality is here to stay. The concept of working from home, spending quality time with family, the pattern of consumption of goods and services, purchasing habits are all in the change mode. We need to adapt to this reality and focus ourselves towards this way of life.

With the emphasis on efficiency of utilisation of resources becoming the rule of the day, with personal and family health and relationships taking pride of place for the good of the community, restoring the environment being of primary concern, it is indeed time that we come together to ensure that our lifestyles change for the benefit of all.

Come, let us together meet the challenges of the times ahead and work together, make our world a better place to be in.

Industry Trends

Industry Trends

The sleep solutions industry in India is going through a revolutionary transformation.

(Mr Mathew Chandy, MD & Chairman, Duroflex)

The sleep solutions industry in India is going through a revolutionary transformation. This transformation is led by increased consumer awareness about the importance of sleep, technological advancements in sleep products manufacturing and advanced research in sleep science. The mattress industry which forms a significant part of the sleep products industry is becoming more organised with the branded sector growing at 17% CAGR in the last 5 years. This an indication that consumers are understanding the importance sleep and its rich health benefits and are seeking out research backed, high quality sleep products from trusted brands. This is a very exciting time to be part of this burgeoning industry.

Duroflex is India’s leading and the fastest growing sleep solutions company with over 5 decades of expertise. Today we have a national footprint, cutting edge products, many exclusive technologies and fully backward integrated manufacturing facilities making it India’s fastest growing mattress brand.

Duroflex, as a brand, is well known for quality, innovation & comfort. We design mattresses based on consumer needs and have perfected the art of manufacturing Hybrid Mattresses with Spring, Rubberized Coir and Foam. We also manufacture accessories like Pillows, Bed Sheets, Mattress Protectors and other soft furnishing products, using good quality raw materials and state-of-the-art machines. We have been known for our industry-first innovations and that has helped us be flag bearers of the latest in sleep technology. Putting consumer needs first, we were first in the category to put forward a portfolio of products based on their needs rather than input material. Our three signature mattress ranges include Duropedic, Energise and Natural Living, all designed to address customer needs.  Duropedic is also India’s only certified orthopaedic mattress range.

Duroflex is also the first mattress company to be ISO 9001 certified. Our stringent quality controls, adaptation of the latest technology and constant effort in research & development has enabled the brand to export its products to various international markets.

As an ever-growing and leading brand, one of key to our success has been the support we get from our trustworthy and expert partners. We have been closely associated with Korah & Korah for many decades. Their acumen and expertise have been instrumental helping us grow from strength to strength.