It’s Reigning Women

Family businesses in India are witnessing more and more women are taking over companies

Today women are fast taking the place of sons in running the family business empire. According to the American Family Business Survey, the number of female CEOs has doubled every five years since 1997. The survey indicates that more than 24 percent of the businesses currently have a female CEO or president, up from about 5 percent in 1997. The growth should continue as 31% of those surveyed indicated that they may have a female successor.

More and more daughters are also inheriting the family business in India. An Indian School of Business (ISB) paper on ‘Women in Family Business’ points out that currently women entrepreneurs make up about 10% of the total entrepreneurs in the country. This percentage is growing every year and is likely to reach 20% of the entrepreneurial force in India in the next few years.

In India the trend of daughters inheriting family businesses picked up steam after 2005 when the Hindu Undivided Family (HUF) succession norms were amended and girls were allowed to inherit equal shares in family businesses. The Hindu Succession (Amendment) Act of 2005 removed gender discrimination with regard to inheritance in Hindu joint families. Previously, only the male line, to great-grandson, had inheritance rights.

Perhaps the biggest change in the past couple of decades has been the increasing importance of educational qualifications. A growing emphasis on education has helped to raise the status of women in family businesses. Many have also worked abroad before returning home to take up jobs with the family business. Education and exposure have led to greater societal acceptance of women participating in family business. A few are also foreign educated waiting in the wings for winning top jobs in their groups.

Prof K Ramachandran, of Hyderabad-based Indian School of Business (ISB), was quoted in the media saying that “There is a huge change in attitude toward girls, with the number of children in any family coming down. Families sometimes have only one or two girls. I do not say that it is new found love for daughters but realization of an opportunity to share parental wealth among all children independent of gender.”

However, women today are challenging the stereotype assumption that men are the best and most qualified candidates for taking over the family business.

Speaking at the CII-FBN India Chapter XV International Convention on Family Business held in New Delhi recently, Dr Annelie Karlsson, Executive Director, FBN Sweden, said, daughters are becoming more and more influential in the family businesses. “Despite young male members to take charge of the business, many of the young female members are becoming the heads of business,” she concluded.

National Optical Fibre Network: viable business models for inclusive growth

A report on the role of broadband for inclusive growth in India, ‘Creating viable business models for inclusive growth through the National Optical Fibre Network’ by CII & KPMG, was recently released by Mr MF Farooqui, Secretary, Telecom. 

The report explores how, using the national fibre infrastructure, commercially feasible business models for relevant e-services in areas such as education, healthcare, banking and agriculture can be built on the foundation of a Public-Private-Panchayat ecosystem.  This report is expected to serve as a useful reference for the Government and the industry as they jointly deliberate on how best the national fibre network asset can be leveraged.

Key Highlights:

• With its promise of delivering speed up to 100 Mbps, the National Optical Fibre Network (NOFN) has significant potential to deliver e-services to India’s six lakh plus villages in the areas of education, healthcare, banking and agriculture. These services can speed up the Government’s inclusive growth agenda while generating rural employment, skill-building and growth.
• Private players may have been hesitant in certain instances to venture out into the remote areas as the business case of being able to provide scalable, profit-driven services appears uncertain. However, several e-service pilots have been trailed successfully on a limited scale and with a non-profit motive, indicating that there is demand for such services
• To scale up these e-services, a Public-Private-Panchayat ecosystem – comprising the Central and State Governments the providers of enabling products and services (both public and private), and local governing bodies (Gram Panchayats) – needs to come together and build commercially sustainable business models that provide affordable services to the end-users and also generate adequate commercial and social returns
• In Healthcare, telemedicine services involving remote consultations using two-way video conferencing can address the dual challenges of low doctor-to-patient ratio and the lack of access to specialist advice in rural healthcare delivery. Such telemedicine units can be set up directly by private healthcare service providers or offered through the Common Service Centres (CSCs)s, with the Village Level Entrepreneur (VLE) leading the service.
• In Education, NOFN can enable remote learning environments in Government-run rural schools, and thus address the challenge of high pupil to teacher ratio and declining learning quality. Such ICT-enabled environments can be operated by private education service providers. High-speed broadband can also enable online vocational training imparted at the CSCs for a nominal fee
• Private business correspondents can use connected point-of-transaction terminals to conduct nearer-home cash-in-cash-out banking transactions for the rural population. Such models already exist, but NOFN can further boost these models by resolving connectivity issues. There could also be a model where private sector banks integrate their IT systems with that of the Post Offices to offer a bouquet of banking-related services to rural customers
• In Agriculture, broadband can address the high information asymmetry existing among farmers by providing them with timely information and advice on relevant topics. There could also be software tools provided by technology companies for farm management, soil analysis, seed analysis, etc. These services could be provided through kiosks run by rural entrepreneurs or through the CSCs at a nominal fee charged to the farmers.
• While many of these business models could be self-sustaining, a few would require some money to be infused in the hands of the consumer to generate demand. The report proposes the possibility of channeling funds from existing Government programs such as Sarva Siksha Abhiyan and the new National Health Mission (a new program created in FY14 combining the National Rural Health Mission and the National Urban Health Mission) to create this corpus.
• For many of the priority sectors, the existing network of nearly 1 lakh CSCs can form a good starting point. Equipped with computers, basic peripherals, Internet connectivity, and a VLE owning the centre, these CSCs can act as multi-service delivery points for several e-services. High-speed broadband access is expected to broaden the range and improve the quality of e-services available at these CSCs.
• Recognizing the potential of coupling the Government’s social imperatives with the private sector’s commercial interests, and appreciating the need to bring together multiple stakeholders from the government and the private sector to this effect, the report proposes a CII-Government Working Group with a well-defined set of objectives and responsibilities. With such a diverse, yet cohesive body at the helm of planning and execution, it will be possible to bring the multiple facets of expertise, decision-making and administrative guidance that will be essential to harness the NOFN into a medium of holistic inclusive growth.

Click here to download the report