Sunday, December 22, 2013

A 'loyal critic' is good for family-owned businesses

1 comment:

  1. Today's article on "anchor shareholder" provides a fresh thought process. I have experienced both the extremes (one purely at increasing the monetary benefit) and the other (an independent critical evaluator) in predominantly private sector companies. I could see from experience that the second option proved to be better on a long term wealth creation and business sustainability. Although independent director is a "loyal critic" many a time, but changes his approach when a crisis situation arises due to a factor which could have been avoided due to the "wilfull blindness" of the independent director. I saw the benefit of independent critical view in the forex SPV crisis of 2009 which saved many companies at the same time plunged many others into difficult situations who had "loyal ​critics". In the later case the Board absolved itself by finding the then CFO as a scapegoat.