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Indian promoters reluctant to cede management control: Assocham

It said promoters holding over 50% or lower stakes are not willing to bet fully on professionals

Press Trust of India  |  New Delhi 

N R Narayana Murthy
Infosys co-founder N R Narayana Murthy

Promoters seem to be reluctant to cede complete control of Indian companies to professional boards and managers, says an survey of 155 chief executive officers.

Against the backdrop of instances of promoter-tussle coming to the fore, the survey also found that a significant number of promoters having more than 50 per cent stake in companies are not willing to bet fully on professionals.

"78 per cent of the 155 CEOs both from professional and promoter driven firms, answered in the negative to when asked whether the promoters are willing to cede complete control of corporate India to independent boards and CEOs," the survey said.

It said promoters who are holding over 50 per cent or even lower stakes are not willing to bet fully on professionals.

"deficit and the family pre-dominance were the two of the main plausible factors coming in the way of transformation of India Inc where the day to day operations are insulated from the principal shareholders or group of shareholders like in the US," it added.

Secretary General D S Rawat said that "one must give credit to N R Narayana for continuing with his belief that must be run by professionals despite the fact that the experiment has failed once".

First Published: Sun, September 10 2017. 13:40 IST