Monday, March 12, 2018

The CEO at home

This article was first published in ISB Spandan, Vol. 2, Issue. 2, February 2018;

“I have been inspired by her. What little success I have achieved, should be credited in large measure to my wife’s influence.”- A rare legacy- Memoirs of Basant Kumar Birla
“Please understand. If I don’t do it, who will? The buck stops at me”. The buck is supposed to stop at both of us with regards to our child. But it usually stops at me because you are not around!
“I will be leaving at 4am tomorrow and will be back at around midnight”. But you just came back from Uganda? Must you travel again immediately?
“Anything urgent? I am in a meeting”. Can I only speak to you when there is an urgency?
“Please sleep, I will not be able to call today. Will get free only after 11pm. It will be 2am for you”. But we have just spoken 4 words since you left 4 days back.

These are snippets of regular conversation at home between my husband and me. My husband is a serial entrepreneur. Even as one business is getting established, he moves on to the next one. When I think of the life that we could have had if he decided to take up a regular job- foreign vacations, attending parents-teachers’ meetings and social outings together and so on- the grass definitely looks greener on the other side and I must admit that the sacrifices do not seem worth it at times.

It is said that behind every successful man, is a woman. I would say that behind every successful man is a wife who spends hours worrying about the time her husband would be back home, managing the family while he travels extensively, taking flak for his absences from the extended family and sometimes not even being able to talk on the phone while he is firefighting.

The journey of an entrepreneur is laced with passion, hence seems pleasurable to the entrepreneur. The wife need not share the same passion and it is difficult to understand the long hours, the ever-shifting goal posts, the failures and hence the opportunity costs.

The role of the wife of an entrepreneur is as important as the entrepreneur himself in the success of the enterprise. She is the Chief Emotional Officer (CEO) who works tirelessly, with patience and perseverance, to maintain stability at home, inculcating the right values in children and their overall upbringing, keeping the communication flowing, being the cheer-leader in an environment of chaos and uncertainty and listening to the stories of challenges at work that never seem to end.

The CEO at home is invisible, plays subtle and less formal roles of supporting, advising, listening and at times emphasizing on the humane aspects of business decisions. Their observations, emotional capital and intuition go a long way in shaping the big picture for the entrepreneur.

Whether a wife is a home-maker or working, it doesn’t matter. Being married to an entrepreneur is not easy, yet exciting. So cheers to the entrepreneurs’ wives and to women in general who have the uncanny ability to handle a variety of situations with aplomb.

Let’s give them a dream who help us achieve our dreams!

This article was first published in ISB Spandan, Vol. 2, Issue. 2, February 2018. It won the second place in a woman’s day special contest.

“She isn’t coming tomorrow. You can’t travel on a day she’s not coming”, I said. “But my tickets are booked for a 6.30am flight”, replied Pavan. “Postpone it. Take a post noon flight”, I retorted, clearly irritated. “Ah alright! Your LSS-2 will be at your service till 10am tomorrow. Happy?” said Pavan, in an attempt to lighten the mood. “Good”, I replied, feeling relieved, and walked out of the room.

By nature, I worry a lot. I find it difficult to leave unwashed utensils in the sink or clothes lying on the bed or toys spread out in the living room. Her presence ensures that I am not constantly worried about the household chores while at work. I am assured of entering a neat, clean and orderly home in the evening and finding my kid well fed and in a state where I can still recognize her. Behind my success at work and a happy peaceful life is a good LSS-1 (well, even LSS-2. But this article is about LSS-1. So, another day, another article on LSS-2).

In case you are still wondering about what is LSS-1 and LSS-2, no they aren’t the latest offering from the stable of ISRO or NASA, LSS stands for Life Support System. Pavan, my husband, calls himself my Life Support System-2 and our domestic help as my Life Support System-1.

For many of us, the urban-working-women, our domestic help is an important part of our lives. They are a category of women who see affluence closely and daily, with little hope to experience it themselves. This is unlike the other category of workers- be it a labourer on a factory site or employed in an infrastructure project or the bottom most in the pyramid employee of a hospital- who do not really see the rich and their lifestyle so closely.

Most of these women are not supported or are left by their husbands to fend for themselves and for their children. They tolerate the abuse at home and often indifference at their work place, while staring at an endless tunnel with no light. They work for mere survival from one day to the next, to put a roof over their heads and some food in their belly.

What are their own aspirations? What is their aspiration for their children? Don’t they deserve a better life? A better future? They are not even recognized by the Government. There are no set wages, no regulations regarding the hours of work, about the scope of work, leaves or pension. There is a draft Act on the anvil but it is yet to see the light of the day!

Drawing an analogy with the Gallup State of the American Workplace study- “people leave managers, not companies”, I can say that the poor performance of the domestic help and their frequent job changes has as much to do with us. They were not born to be domestic helps. Circumstances have made them so. They too need training, empathy, support and security, just like we do in our jobs.

This is a tribute to all domestic helpers who make our lives easier and allow us to pursue our dreams while not having any of their own. As women who have moved up the social ladder and are blessed to be where we are, let us all, in whatever capacity we can, make this world a better place for them as well!

Monday, March 5, 2018

India’s Far-Reaching Tax Reform

This article was first published in GARP Risk Intelligence on March 02, 2018; Co-author: Anisha Sircar and Nitya Bodavala

The objectives of the Goods and Services Tax are clearly stated, but the implementation is complicated

On July 1, 2017, the Indian economy experienced its second historical policy overhaul in under 12 months (demonetization being the first). The Goods and Services Tax (GST), the most dramatic tax reform in the country since 1947, had been under way in parliamentary dialogues for almost a decade – in contrast to the sudden implementation of demonetization. Seeking to unify many central and state taxes and streamline the existing indirect tax system, GST had ambitious goals mapped out for the country’s economy.

The potential positives of GST have been well-touted: the common tax system will reduce the incidence of double taxation, lower business costs across sectors, bring India’s informal sector into the mainstream, and increase exports, benefiting the overall fiscal health of the country.
But there are several issues related to the implementation of the GST, among them: reliability of the information technology, documentation hassles, potential revenue losses, and an abstruse anti-profiteering clause.

What is GST?
The Constitution Amendment Bill for Goods and Services (GST) was passed on August 3, 2016 by the Rajya Sabha, upper house of the Parliament. A single, uniform tax levied across India, on all goods and services, GST was proposed to sew together a common market by removing fiscal barriers between states. It was anticipated that India’s tax structure would become more comprehensive, a common market would develop, and the cascading effects of multiple indirect taxes on the movement of goods and services would be reduced.

In theory, GST is simple. The government charges a series of indirect taxes (alongside direct taxes) to raise revenue for public expenditure. Under GST, at least ten types of “indirect taxes” are subsumed under a single system, putting an end to the hitherto several levels of taxes levied on commodities as they move through the production cycle. Taxes under the system are collected on a “value-addition” basis, at each stage of sale or purchase in the supply chain.

Impact on the Economy
GST is viewed as a game-changing reform because it impacts the structure, incidence, computation, payment, and compliance of indirect taxes, as well as credit utilization and reporting. Its main purpose was to eliminate the compounding effect by combining central and state indirect taxes and fixing a final tax rate, where all goods and services would fall into five distinct tax categories, and where value-added tax laws did not differ across states, thus making it less problematic for both the producer as well as consumer at each stage of in the supply chain.

Before, myriad taxes were applied at the central and state levels. After the implementation of GST, only three types of taxes are applied:
  • Central Goods and Services Tax (CGST), levied by the center on intra-state supply.
  • State Goods and Services Tax (SGST), levied by the state on intra-state supply.
  • Integrated Goods and Services Tax (IGST), levied on goods and services for intercourse trade or commerce, imports, and exports.

Under the new system, transactions have “slabs” of tax rates, depending on the nature of the good or service. All items, ranging from agricultural and necessity goods to luxury goods and consumer durables are categorized in the five major tax slabs of 0%, 5%, 12%, 18%, and 28%. The range is from zero on items deemed as essential or necessity, 28% on goods deemed as luxury.

‘Level Playing Field’
With this system replacing the multiple-tax structure, a more uniform regime has been implemented, state-specific advantages and disadvantages are set to diminish (because smaller businesses now get to make higher profit margins, and offer lower prices than their competitors, thus “leveling the playing field”); the average costs of goods and services across the country are reduced with the elimination of double taxation; inflation may decrease in high-productivity categories; and commodities can easily move across the country, with reduced transaction costs and transportation inefficiencies for businesses.

An ancillary benefit is that the threshold for companies exempt from paying indirect taxes has been reduced from Rs. 15 million to Rs. 1 to 2 million, depending on the location of the company, thereby attempting to bring the informal sector into the fold of the formal sector of the economy.

Further, taxes paid by the consumer are not only structurally straightforward and transparent (as opposed to a slew of overlapping and elusive taxes), but the final tax itself is set to reduce, thereby having a positive effect on consumption and boosting the economy at large. In this way, the simplicity of the tax structure appears set to bring about greater tax compliance, increasing the tax base and, in turn, revenue for the government.

With an overall decrease in production costs, and with GST not levied on exported goods and services, India’s international competitiveness is expected to increase.

From a macroeconomic perspective, then, the long-term impact of GST on the economy seems favourable: improving efficiency, widening the tax base, narrowing the gap between the informal and formal sector, and increasing overall fiscal health.

Technology and Other Challenges
One of the hallmarks of this tax reform is the introduction of the Goods and Services Tax Network (GSTN), which records all GST transactions and is supposed to be conducive to seamless documentation, debit recording, and credit disposal.

However, a lack of timely migration into the network can be detrimental to the viability of the tax program, because the IT infrastructure is the only means to track and implement the new system.
Also, verifying and legitimizing the data provided online is a mammoth task, given its estimated 70 million users. Because GSTN has refused the Comptroller and Auditor General of India access, citing its “private entry status,” there is little scope for auditing the authenticity of GSTN information, which could compromise public trust.

Additionally, particularly in the short-term, small and medium-size businesses are facing difficulties in integrating and transitioning to the new system, in terms of cumbersome documentation requirements, complex and unaudited IT systems, and adapting to the new taxation on their businesses. There have been day-to-day business disruptions and revenue losses during the transition phase. And lower thresholds for tax exemption imply that a manufacturer, service provider, or retailer who did not face a tax levy, will now enter the GST network, which could increase their costs.

The fundamental drawback with the tax code is that the onus is placed on the purchaser, who is responsible for filing all documentation on behalf of the supplier, in order to acquire input tax credit. Problems could arise if inconsistencies are found in suppliers’ documentation at later stages, in which case the buyer would end up having to pay for not only his/her share of tax, but also for the supplier’s share – or be forced to pay back the tax reimbursement to the government with interest. This problem could be fixed in the long run by market forces, which ensure non-compliant suppliers lose out on customers; and by a government mechanism to allow customers to pinpoint such defaulters, which is expected to take effect in the future.

Finally, the anti-profiteering clause requires that businesses pass on any benefits of the changes to the final consumer. However, because of ambiguity in the framing of this clause, firms might be affected as tax authorities will be given the leeway to make arbitrary judgments about whether a business is engaged in profiteering or not. Simultaneously, consumers will be affected because of the lack of transparency in the ruling, giving rise to fears that political connections or corrupt practices will affect these judgments. Again, this ties in to a compromise in the public confidence in GST – a fundamental determinant of the success or failure of the new tax regime.

Course Corrections
The GST Council, empowered to oversee tax rates and regulations, and composed of finance ministers from the states and center, has been meeting monthly to take stock and propose alterations with respect to the implementation of GST. The council has lowered the rates on several items to help distressed industries and eased the burden of compliance in response to problems faced by traders. The deadline for firms to file their forms was also extended, which was welcomed as a huge relief for businesses.

While these are welcome alterations, several issues remain unaddressed. The GST system is expected to span the country by April 2018. It remains unclear how inter-state business interactions will be impacted, and industries have good reason to worry about extant as well as fresh complications. But amidst the flurry of documentation requirements, IT adjustments, and anti-profiteering provisions, it would bode best for the government to work to bring more clarity to the remaining grey areas and instill a stronger sense of confidence, for both producers and consumers, in the theoretically promising policy endeavor. Most strikingly, the issues surrounding GSTN and auditing the complex IT infrastructure remain a fundamental barrier to all-important public confidence.

If implemented correctly, the outcomes from the reform will reflect its much-needed economic rationale. Eliminating double taxation and multiple tax hassles, increasing efficiency, assimilating the informal sector, lowering transaction costs and product prices, and intra- and inter-state movement of goods and services could be overwhelmingly positive boosts for Indian markets. Perhaps with a committee to oversee complaints, a more comprehensive auditing system, more specific delineation of what is “anti-profiteering,” and more widespread educational efforts, much-needed corporate and public confidence in GST could be instilled.

Thursday, February 22, 2018

The rise and rise of family firms

Though late on the scene, standalone family firms have established themselves as formidable players

This article was first published in Forbes India magazine, Issue: March 02, 2018; Co-author: Kavil Ramachandran

The year 1991 ushered in a new dawn for the Indian economy with economic reforms across sectors. The entrepreneurial spirit among Indians took advantage of the opportunities, and a new class of family businesses—the standalone family firms (SFFs)—emerged.

In a paper titled Family Business 1990-2015: The Emerging Landscape published by the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business in July 2017, we said that by 2015, SFFs accounted for 57 percent of the 4,809 listed firms studied. Close to 73 percent of these were incorporated between 1981 and 1995. SFFs were, in a sense, a creation of the new reforms.

Prominence in the ecosystem
Though SFFs emerged late in the entrepreneurship ecosystem, they soon established themselves as an integral and leading player, belying worries about the potential of family firms to withstand competition. Evidence suggests that the removal of restrictions and controls led to this spurt. Several factors have shaped the destiny of SFFs.

New opportunities: Post-1991, structural changes in the economy and industry provided multiplier effects. Many entrepreneurs were either from business families or became one because of ownership structures. Reduced controls enabled the entry of first-generation-entrepreneurs-turned-SFFs into new territories. Ease of access to the capital markets enabled them to raise funds early on. The average difference between their listing year and their incorporation year was 10.01 years, much lower than business group-affiliated firms or MNCs. 

Need for scale to be competitive: The removal of ceilings on capacity and investment, the need to improve efficiency, and scale up led SFFs to focus on a single firm with related products, services and markets. Entrepreneurs did not need to diversify and establish multiple firms to grow, as was the case earlier.

Break-up of the joint family: Historically, business groups had flourished under the ownership of joint families. The emergence of nuclear families meant there was room for next generations to get involved in the same business, without the need to incorporate multiple firms for the members of the next generations.

Unique value creation by SFFs
SFFs have long-term orientations towards success across generations; rarely is enterprise exit an option.

Most successful SFFs have a strong synthesis of entrepreneurial energy, professional discipline and organisational governance. Promoters with sound family governance provide a strong platform to build the enterprise on a rich resource pool of emotional support, committed manpower and continued purpose.

One of the compulsions faced by SFFs is to remain together for economic reasons, if not for emotional reasons.

Emerging challenges
More than half of SFFs are less than 30 years old, with the founders still actively involved in most. Many would be staring at a change of guard soon. It needs to be seen if these firms survive the change.

SFFs have to pay greater attention to their future strategy, professionalisation and governance at family and business levels. There is every chance of a well-run SFF getting into a growth trap unless proactive action is taken on strategy, professionalisation and governance. 

Wednesday, December 6, 2017

Ignoring culture can be perilous in succession planning

Many of the family businesses in India that were incorporated in the 1980s and 1990s are now 25 to 30 years old. Their promoters would be close to hanging their boots and passing on the baton to a worthy successor who would keep the family values intact while ensuring sustainable growth for the company. But who would be this worthy successor? Many of the millennials or xennials prefer to start their own entrepreneurial ventures or pursue other interests. This leaves the founder with no option but to look outside the family.

Culture- overlooked factor
Education, proven track-record, vision and strategy for the company are all important in identifying a successor; one issue which is often overlooked is the match between designated successor’s values and the culture of the organization. When companies are newly established and smaller, the founders’ values, traditions, beliefs and style translate into the culture of the firm. This culture becomes the unwritten but well-understood code of conduct throughout the firm. The founders tend to retain the same culture even after becoming a large organization. Succession in such organizations, with promoters who have overarching personalities is always tough. Due diligence of the successor’s values and its fit with the organizational culture is critical to the continued success of the firm.

Cultural Due Diligence
There are two ways to look into the successor’s cultural fit with that of the firm. Either the new leader’s values should match with the existing culture of the organization. Or, the potential successor’s leadership style should be strong enough to change the culture of the organization, if that is necessary for the well-being of the firm in the changing business environment.

The best way to deal with the issue of culture is for the board of directors to do a cultural due diligence of the organization and match it with the value system of the potential leaders. To determine what should be the organizational culture, an audit of the existing culture and then an assessment of the required culture needs to be undertaken. The board of directors would play an important role in facilitating this exercise with the help of company executives or an independent consultant. They also need to decide which core values need to be retained and what new values need to be inculcated for the company to emerge stronger. Based on this assessment, the potential successors need to be evaluated for a cultural fit.

The founders/promoters/board need to be clear about what they want for the company and from the successor. At the Tata group, after an initial failure, Ratan Tata made up his mind to continue with the culture that he created and appointed an insider.

Allowing Change in Culture
In the event the successor attempts to change the culture, the outgoing leader should be willing to stand aside and allow it. When Ratan Tata took over Tata group, the group companies were run by independently minded satraps who treated their respective companies as their personal fiefdom. Ratan Tata took a strategic decision that to operate in a free economy and to keep the group cohesive, it was important to remove a few of them and he was strong enough to do so in boardroom battles. He brought in a culture wherein it was emphasized that each company was part of a larger group. Also, JRD Tata, the predecessor of Ratan Tata did not interfere with Ratan Tata’s functioning.
On the other hand, in the case of Infosys, the founders of Infosys who practised frugality even in their personal lives was a stark contrast with the background of Vishal Sikka. Sikka was immersed in Silicon Valley work culture- that amongst others (especially innovation) rewarded the top management very well, much higher than an average employee, going against founders’ idea of ‘compassionate capitalism’. The differences in backgrounds and values resulted in the well-known ouster of Sikka.


It is important to remember that the purpose of cultural due diligence is not to eliminate culture clash- a likely event even in the best of circumstances. Nor is the purpose to find a perfect fit between the organization and the leader. The purpose is to have a fair amount of culture-value debate about what is best for the organization under the new leader, for the promoters to be prepared and to prepare the organization for what is to be expected from the successor.

Tuesday, October 31, 2017

Take H-1B cuts by the horns

This article was first published in the Economic Times on October 27, 2017; Co-author: Jaya Dixit

Former US President George W Bush spoke about democracy and free trade at the ‘Spirit of Liberty: At Home, In the World’, event in New York on October 19 ( He spoke of the values that made the US great and said, “conflict, instability, and poverty follow in the wake of protectionism”. On Monday, the US Citizenship and Immigration Services released a memo that ordered its officers to apply the same level of scrutiny to an H-1B extension request as they had to the initial application, consistent with policies “that protect the interests of US workers”.

Amid these stricter H-1B visa norms and US President Donald Trump’s protectionist agenda, there is an ongoing debate if the Indian government should also put some form of restrictions on US companies. This leads to a broader question — when our trading partner engages in protectionism, then is eye for an eye a good idea?

Protectionism refers to restrictions on foreign goods and capital, including human capital, to reduce or eliminate their access to domestic markets. Countries throughout history have utilised this as a tool under the misguided belief that prosperity comes from helping domestic firms against competition from foreign markets. While protectionism protects domestic firms from outside competition, it results in inefficient allocation of resources, higher cost for consumers and possible non-fulfillment of demand. On the contrary, free trade allows for goods and capital to flow into businesses where the firms have a comparative advantage.

Competition frees up capital that is tied up with firms that are not good at what they do, either in terms of quality or efficient use of resources. Foster Competition Hence, competitive forces, be it international or domestic, lead firms to become more efficient through consolidation or development of technology and skills.

This, in the longterm, is beneficial to the firm, the customers and the country. So should protectionism be answered by protectionism? Proponents claim that subsidies by international governments are unfair and, hence, we must do something to protect our businesses. However, eye for an eye strategy in this case leads to a worse deal for domestic consumers who could have enjoyed cheaper products leading to greater discretionary income that can be re-invested into the economy. In addition, subsidies, tax breaks etc. to some, and not to others, exist even within domestic markets.

Furthermore, in the extreme case where an entire industry is displaced, the freed-up capital would be put to its highest valued uses. Any unemployment caused will only be temporary in nature. While painful in the interim, it would lead to better outcomes in the medium to long term.

In the early 1990s, there was a lot of opposition to economic reforms from the informal group of Indian industrialists known as the ‘Bombay Club’. Perhaps they thought, similar to several countries implementing protectionist measures nowadays, that opening up of borders would harm their bottom-line, expose them to competition from companies with better technologies that came from countries that had enjoyed advantages of free market much longer than they had. Avoid A Counteroffensive Their resistance was unfounded. Indian businesses did very well and contributed significantly to the growth of India ‘even after’ liberalisation.
In fact, after markets were opened to foreign capital and goods in the 1990s, founding of new businesses — both by business groups and stand-alone firms — increased tremendously as shown in a research paper by Murali Chari and Jaya Dixit (‘Business Groups and Entrepreneurship in Developing Countries After Reforms’, Journal of Business Research, 2015,

When free markets are allowed to function they increase the size of the pie that can be shared leading to benefits for domestic businesses, consumers and the nation. Even if a country erects trade barriers, responding in kind would not be beneficial. For example, in the current case of H-1B visa restrictions, it would not be in India’s benefit to respond with trade and capital restrictions on US companies. One likely scenario due to the H1B restrictions and other US protectionist measures is that US companies may feel pressured to disaggregate their value chains leading to setting up of more offices, R&D centres, manufacturing facilities abroad.

In such a scenario, countries that provide the most pro-business environment will be benefitted. This is only one scenario. But there could be other scenarios where US protectionism is beneficial for other countries, but not if they respond with protectionism. So then is the protectionist rhetoric a good idea to dissuade other countries from adopting protectionist policies? For example, is it a good strategy politically to have a rhetoric of tit-for-tat with respect to protectionism, in order to put pressure on US policymakers while having no intention of putting these restrictions in place?

This is a slippery slope, as any policy rhetoric is also a negative signal to US companies that may be trying to find new home for themselves and searching for new markets. Two wrongs do not make a right and neither does answering protectionism by protectionism. The costs of protectionism are far greater, even if not obvious, than the transitory costs of moving to a free market. Free trade works regardless of whether any other country engages in it.

Thursday, October 26, 2017

Un-please to succeed

This article was first published in Business Standard on October 26, 2017; Co-author: S. Subramanian

Leaders of family-owned businesses must adapt to the changing times

The role of the family business leader depends on the background of the family, its structure and the conditions under which he assumes that role. Someone who becomes the leader during times when the family and its business is struggling may face very different kinds of challenges than one who becomes a leader in a planned manner. The challenges also depend upon the preparedness of the leader, turbulence or stability in business and the support of the family as well as the business team. While the role of the leader in the business and the family is shaped by the circumstances, almost all leaders must learn to un-PLEASE to ensure continued success.

·      Please: Allocating resources in a way that takes care of the necessities without demotivating the members, and at the same time keeping the respectability of the family and business intact. Many a times the family members may not be pleased with the decisions, but if it is in the long-term interest of the business and it must be taken, the leader should be able to convince the family members.
·      Loneliness: The authority that comes with being a leader often comes at the cost of loneliness, especially in the case of founder-promoters. The loneliness of the leader would prevent divergent viewpoints coming from different family members and next-generation members that often result in innovation, new venture creation and critical review of resources allocation to adapt to strategic changes in family firms.
·       Entitle: In financially sound business families, it is often seen that the members or the next generation feel entitled to the business. This is especially not right for companies that have external shareholders. The competitive environment and increasing shareholder activism would not allow such entitlement. A recent example is the attempt by the Singhania family factions to get the prime property owned by Raymond Ltd. at throwaway prices that was defeated by the non-promoter shareholders.
·       Assume: The “license raj” provided continued success for family businesses due to limited competition in the markets. Hence the leaders assume successful business is in their genes. Such assumptions don’t suffice in a competitive environment. Many top business houses that were a part of the Sensex in 1990 are no longer amongst the top, like Thapar, Mafatlal, Modi, Walchand and Kirloskar.
·       Settle: During the days of closed economy, business was predictable to a greater extent. However, recent years indicate that innovation is key to survival. Companies that become complacent soon turn irrelevant. Till 2014, Micromax was a leader in low-priced phones in India. It had a good distribution model that helped it enjoy a lead. In the past two years, Chinese firms like Xiaomi have dealt a massive blow to it with innovative designs, reasonably good quality phones, high-end configurations and innovative distribution at low costs.
·     Establish: In family-owned businesses, the leaders have established authority over the professional top management. The leader’s decision is final, even if it is wrong in the business perspective. Often the Board of Directors too falls in line with the leader for fear of upsetting him. A good leader is one who is able to put processes in place for fair and informed decisions to be made.

The roles and challenges of each leader may differ. However, what cannot be questioned is that he must work for the welfare of the entire family and the long-term interests of the organisation. Whether the decisions are business- or family-related, the leader must be fair to all, there should be no imbalances. In the process, they may end up displeasing a few people. As long as it is in the long-term interest of the family members and the business, it is ok to un-please at times.