Boards are getting younger as the startup culture catches the fancy
As the startup culture catches the cravings of the young demographics, the boards of Indian companies are getting younger. Especially in technology, young graduates are seeing entrepreneurship as a practical and attainable alternative to regular jobs. Due to this Startups in India are valued at $1 billion or more with more than 100 unicorns.
“The higher percentage of younger directors is largely driven by the rise of the Indian startup ecosystem and the growth of young entrepreneurs. This trend is expected to continue given the growing interest from youth in entrepreneurship as well as the backing of private equity, venture capital investors, and the government’s impetus to the startup sector,” said Raja Lahiri, leader of the tech, media & entertainment at Grant Thornton Bharat.
Another key factor contributing to this sudden rise in startups is the central government’s push for ease of doing business. According to experts, five years ago starting own business was a burden and one had to go through several regulatory requirements to incorporate a company.
“These days incorporation of a new company has become fairly easy. Popular culture has also had its impact on the youngsters as some of the popular TV shows on startups have brought aspirational value to starting of a new company,” said Shriram Subramanian, founder, In Govern Research – a proxy advisory firm.
Any individual who wants to start a company or be on the board of a company needs a director identification number (DIN) as per the rules. In the last fiscal year, the ministry of corporate affairs (MCA) reported, that over a third of all DIN recipients were under the age of 30.
The MCA had issued 420,000 DINs in fiscal 2022 of which nearly 123,000 were younger than 30 years, while another 182,000 were aged 31-45 years, according to the data.
Mumbai, being the state for fintech companies, the new directors under 30 years of age, nearly 20,000 (18% of the total) were addressed from Maharashtra. This is primarily due to the fact presence of the financial services sector including markets and banking in Mumbai, making the state a more likely choice. Surprisingly, Uttar Pradesh took the second position with 13,000 new directors under 30 years, beating the manufacturing hub, Gujarat (7,051), and startup leader state Karnataka (5,905).