Kolkata, Oct 29 (PTI) Promoters remain central to businesses in emerging markets such as India, where investors often repose faith in the individuals who build and lead companies, Vedanta founder-chairman Anil Agarwal said on Thursday, emphasising the need for a gradual shift towards professional management as businesses expand.
“In emerging markets, the face of the promoter is important,” Agarwal said, explaining how businesses in developing economies differ from those in developed markets, where ownership and management are often more distinctly separated.
He said a large part of India’s corporate landscape had evolved around individual entrepreneurs and family-owned businesses, with founders playing a direct role in building enterprises and earning investors’ confidence.
“In developed markets such as Europe and America, shareholders and management are two different entities,” Agarwal said, contrasting the model with the founder-driven character of businesses in emerging economies.
However, he stressed that as companies grow, professional management becomes increasingly important to ensure efficient operations, sound governance and sustainable expansion.
“Professionally, by people, for the people,” Agarwal said, underlining his view on how businesses should be managed.
Referring to Vedanta’s organisational structure, he said its listed and unlisted entities were run professionally, with management teams responsible for executing business strategies. While the promoters provide strategic vision, he added.
He highlighted the challenge facing India’s family-controlled conglomerates of balancing the promoter’s strategic vision and investor confidence in the founder with the need to build professional institutions capable of sustaining growth across generations. PTI BSM MNB
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