The Kerala-based Muthoot Group is “thinking of having a written down family constitution,” the Muthoot Finance Ltd's Managing Director, Mr George Alexander Muthoot, said here today.
Speaking at the third edition of the Family Business Conference organised here by the Madras Esplanade Round Table 30 and Chennai Business School, Mr Muthoot said that up till now the group just followed a tradition, but it would have a ‘family Constitution'.
The conference deliberated on how to sustain a family-run business down several generations. Two speakers at the conference — Mr Muthoot and Mr Vellayan Subbiah of the Murugappa Group — stressed the importance of having regular family meetings to thrash out any differences.
“We have our differences but they all get sorted out,” Mr Muthoot said.
He said that often issues within a family were small and personal, like some members of the family indulging themselves. Whenever such complaints came to him from some family member he would “turn a blind eye”, he said. That approach “has stood us in good stead,” he added. Pointing out the salient differences between professional-run and family-run businesses, Mr Subbiah said that while the former set great store in values such as innovation and empowerment, the latter put their faith more in values such as courage and dignity.
Mr Subbiah said that over 5,000 family-run companies existed in the world, and over 3,000 of them were in Japan. Most of the 3,000 are “deliberately small” and only 6 per cent of them employ over 300 people. Typically, they are conservative and invest much in skills and loyalty of their employees.
Speaking on the subject of raising finance, Ms Kavita Venugopal, Group President and Chief Risk Officer, Yes Bank, said that when it came to funding, banks these days look at aspects such as corporate governance, transparency and regulatory compliance, apart from business plans and potential.
Prof Nandini Vaidyanathan, Founder and Mentor, Carma Ventures, gave several examples of how the digital media was transforming the way businesses are being conducted today. Listening to social media is an indispensable aspect of today's business, she said.