IMA Insights

The failure of Silicon Valley Bank, was the result of a hike in US interest rates and the consequent impact on the value of long dated securities. More of this may happen and puts the Federal Reserve in a bind. On the one hand it needs to raise rates to curb inflation. On the other, higher rates destroy the balance sheets of banks as their asset books begin to crumble with falling bond prices. This could trigger a collapse of the banking system and jam financial markets. A contagion could spread across international borders. 

Transactions that a business undertakes with ‘related parties’ should be subject to a higher level of scrutiny than others, as there is a natural risk that such transactions may be crafted with majority owners’ or management’s interests in mind, at the expense of minority shareholders. However, SEBI’s recent regulations to regulate related party transactions appear to go overboard. They seem to assume that all such transactions are fraudulent unless proved innocent and places the burden of compliance not only on the executive management that takes such decisions but on independent directors as well. This will result in disproportionate time and resources being spent on compliance nitty gritty as opposed to business strategy. This podcast offers a perspective.

'Metaverse' is the latest buzzword dominating Boardroom conversations. Web 3.0 (Web3) and the metaverse are seen, with some justification, as the future of the internet due to their diverse potential applications spanning industries. This podcast explores the emerging meta-landscape, the opportunities it presents and some challenges that may get in the way of its wide-scale adoption. 

Recent attention has been focused on the reversing interest rate cycle as central banks across the world have hiked rates. While this has significant implications by itself, there is a secondary instrument that monetary authorities, starting with the US Federal Reserve, have only just begun to deploy: quantitate tightening. This will magnify the impact of rate hikes and create a new worry for businesses. The attached paper explains.

Budget 2023-24 marked the NDA’s tenth budget and also the last ‘full’ one of the current government. (By convention, election-year budgets are meant to be interim ones.)
At a recent joint session of the India CEO and CFO Forums in Chennai, Ketan Dalal, Managing Director of Katalyst Advisors, decoded the Union Finance Budget in the context of India’s economic trajectory and took stock of its main ‘hits’ and ‘misses’. This podcast summarises the discussion 

Risk management is one of the top priorities for any CFO. Given the rapid changes in the business environment globally, both the nature and scope of risks is changing. At a recent India CFO Forum session in Hyderabad, Monish Chatrath, Managing Partner of MGC Global, discussed the broad principles of risk management, the imperatives for 2023, and the practices CFOs need to adopt in a post-Covid world. This podcast summarises the discussion. 

The reasons for adopting ESG compliance go beyond regulatory compliance or simply ‘looking nice’. Proactively becoming ESG compliant can improve a company’s reputation, access to funding and support for growth. CEOs have an essential role in driving the sustainability transformation of the company. 

At a recent IMA India CEO session in Hyderabad, Anirban Ghosh, the Chief Sustainability Officer of Mahindra Group, drew upon his experience to understand and examine the CEO’s leadership approaches in driving ESG initiatives and achieving successful outcomes. This podcast summarises the discussion.

India’s recent state elections emphasise the extent to which the country’s political landscape is changing. Amidst growing political polarisation, parties are playing on identity issues to further their electoral goals ahead of the 2024 election. Despite the entry of young blood in politics, and the increasing role of ‘merit’ in winning elections, dynastic representation is still alive and well at significant levels.
At a recent India CEO and CFO Forum session, Jaiveer Shergill, a practicing lawyer at the Supreme Court of India and the National Spokesperson of the Bharatiya Janata Party (BJP), shared his insights on India’s political future in light of the aforementioned trends. This podcast  summarises the discussion.

Having tracked top management compensation for almost three decades, IMA’s research indicated that over the last many years, CEO compensation has outpaced inflation by about 1% a year. This is a reasonable trend, suggesting fair remuneration, and should be considered economically sustainable. Our latest report on the subject, based on published data for Board compensation in the financial year 2021-22, shows that top management salaries have recovered after a sharp drop in FY21 but that variability in pay has increased across the Board.
This podcast provides a brief summary. Interested readers may purchase the full report.

Launched in 2015, Moglix is a B2B eCommerce platform the industrial sector. Within just six years, the company entered the coveted Indian unicorn club. This sole founder-driven company offers many lessons and learning for business leaders on building the right business model, growth strategy, and entrepreneurial culture.
At a recent India CEO Forum session, we had Rahul Garg, founder and CEO of Moglix share his journey building the first an eCommerce platform for the manufacturing sector. This podcast summarises the discussion.