In the fast-paced world of startups and business ventures, success is often attributed to factors like intelligence quotient (IQ) and emotional quotient (EQ). However, as the entrepreneurial landscape evolves, a new metric is gaining prominence – the governance quotient (GQ). Founders and entrepreneurs are now being measured not only on their intellectual and emotional capabilities but also on their ability to establish and maintain effective corporate governance practices. This shift in focus is seen as a positive development for the startup ecosystem, ensuring that good governance is prioritized right from the start.
According to Aman Gupta, Co-Founder and Chief Marketing Officer (CMO) of boAt, a leading consumer electronics startup, the governance quotient has become more crucial than ever before. Gupta believes that it is in the best interest of the ecosystem for corporate governance to be taken seriously from day zero. In a recent tweet, he stated, “Apart from other things, founders need IQ, EQ, and GQ. Governance quotient now will become more important than ever, and it’s good for the ecosystem that corporate governance is taken seriously from Day Zero.”
Deep Bajaj, an angel investor and founder of femtech startup Sirona, echoes Gupta’s sentiments. Bajaj emphasizes the significance of establishing robust structures and practices in startups, especially once they secure funding. Unlike regular young businesses, funded startups face external accountability and possess the necessary resources to focus on implementing best practices. Bajaj highlights the importance of laying the right foundation from the beginning, as failure to do so can lead to a perilous path to recovery.
Recognizing the importance of good governance in startups, the Startup20 summit, held during India’s G20 presidency, recommended a comprehensive 63-point self-regulatory framework for startups. These recommendations, released by a prominent think tank in June of this year, are intended to guide startups from their early stages through to the IPO phase. The framework emphasizes the significance of governance practices and aims to ensure that startups are well-equipped to navigate the complexities of the business world.
As the startup landscape continues to evolve, the focus on governance quotient is a clear indication of the growing maturity and professionalism within the industry. Founders and entrepreneurs are now being held to higher standards of accountability and transparency. The integration of governance practices from the outset can help foster a culture of responsible entrepreneurship and lay a strong foundation for long-term success.
Startup founders must recognize the importance of the governance quotient in addition to IQ and EQ. As boAt Co-Founder Aman Gupta emphasizes, good governance is vital for the startup ecosystem and should be taken seriously from the very beginning. By establishing effective governance practices, startups can enhance their chances of success and build a solid foundation for growth in an ever-changing business landscape.
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The Entrepreneur Today Desk