After Sequoia Capital, Info Edge boss Sanjeev Bikhchandani bats for good corporate governance

The most-high profile investors in Indian start-ups are now backing the gold standard corporate governance rules after a series of incidents of financial irregularities in the new-age companies has come to the fore. The latest to join the fray is Info Edge co-founder Sanjeev Bikhchandani who tweeted on Sunday that good governance leads to higher valuations.

“First good governance begins in the founders’ heads. No amount of oversight by investors, boards, audit committees or auditors can ensure a company is well governed if the founders are not committed to this objective,” said Bikhchandani, who is known for scaling businesses like Naukri.com, 99 acres.com and Jeevansathi.com, besides investing in early-stage start-ups.

“When I was on the Board of @makemytrip, I was awarded ESOP. In line with Satish Mandhana’s sane advice, @hitobs, Ambarish, and I decided that the economic benefit of this ESOP should go to Info Edge rather than to me as that would align all of our shareholders’ interests. After all we decided if I am spending time away from Info Edge, it should benefit all of Info Edge shareholders rather than me alone. We thought we had done a small thing. We did not think much about it, “Bikhchandani said.

“However, when @makemytrip listed, we sold the stock, and the profit came to Info Edge, we got calls from several of our institutional shareholders commending us for this act,” he added.

The serial entrepreneur’s statement came on the heels of the leading VC firm Sequoia Capital batting for good governance rules in start-ups.

“Recently some portfolio founders have been under investigation for potential fraudulent practices or poor governance. These allegations are deeply disturbing. We have always strongly encouraged founders to play the long game. We focus on the enduring, and discourage focusing on vanity metrics. Despite that we find some counter-examples of what we espouse. It makes us reflect on what we could have done, along with other investors who have partnered in these companies, to prevent such situation, “Sequoia Capital India had said in a blogpost.

Recently high-profile start-ups, including BharatPe, Trell and Zilingo – whic are all Sequoia Capital portfolio companies – have come under scanner with their respective founders found involved in alleged financial irregularities and violating corporate governance rules.

As of now, the co-founders of BharatPe and Zilingo, Ashneer Grover and Ankiti Bose, respectively, have been suspended by the respective company boards for their alleged involvement in financial frauds and for flouting governance rules.

Also read: The Big Squeeze: Is India’s start-up ecosystem in trouble?

Also read: India’s Start-up Founders Need a Reality Check

Also read: Number of recognized start-ups increases to 65,861 this fiscal: Govt

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