Industry body CII on Sunday announced it has launched a charter for start-ups that enlist voluntary recommendations on corporate governance keeping in view unique nuances to govern start-ups.
The Corporate Governance Charter also prescribes guidelines appropriate for start-ups based on the specific stages of their life cycle.
"This charter is designed for entities incorporated under the Companies Act, 2013 only, and therefore the term 'Startup'. However, entities which are in the nature of sole proprietorship, limited liability partnership, partnerships may adopt similar structures/ guidelines for corporate governance within their organization," the Confederation of Indian Industry (CII) stated.
The purpose of this charter is to help start-ups become responsible corporate citizens and also enable them to share it with their stakeholders to establish themselves as being well-governed, it said.
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R Dinesh, President, CII, said that early adoption of good governance practices helps start-ups gain tangible and intangible benefits including long-term value creation, stakeholders' trust, better access to finance from investors and banks, reduced reliance on promoters, effective organisational structures and improved chances of long-term survival of the business.
He hoped that the governance charter for start-ups will enable early adoption of good governance practices amongst start-ups and help them evolve into leaders of tomorrow.
Kunal Bahl, Chairman of the CII National Startup Council and Co-founder of Titan Capital & Snapdeal, said it is vital to embed the tenets of good corporate governance from the earliest days of a startup so that, over time, they become part of the organisation's DNA, helping guide and steer the startup and all its stakeholders through various stages of its growth and evolution.
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