At Ambit, we spend a lot of time reading articles that cover a wide gamut of topics, ranging from zeitgeist to futuristic, and encapsulate them in our weekly ‘Ten Interesting Things’ product. Some of the most fascinating topics covered this week are: Business (Board rules for fair play; Silent rise of India’s private ports), Parenting (Stop talking about the ‘Lost Year’), Sports (Victory belongs to the team, defeat to the captain) and Human Resources (What human resources will look like in 2030). Here are the ten most interesting pieces that we read this week, ended April 17, 2021.1) Board Rules for fair Play: Akash Prakash
[Source: Business Standard
In this article, Akash Prakash of Amansa Capital talks about the Securities and Exchange Board of India’s (Sebi) recent consultation paper, tightening rules for appointments and resignations of independent directors. The proposed rules bring in some much needed changes as to how independent directors are selected, voted on and possibly even remunerated. Normally, minority shareholders, whose interests are supposed to be represented by these independent directors, have very little say. Either these directors are appointed as additional directors and become afait accompli or their election is ensured with the promoters typically being able to push through an ordinary resolution on the strength of their votes alone (especially as many foreign portfolio investors do not vote).
How many boards in India would actually vote to sack a CEO/ promoter? The proposed Sebi rules make the election or reappointment of each director subject to a dual vote. A majority of all shareholders have to vote for the proposed director, as well as a simple majority of the minority shareholders (non-promoter shareholders). If either track votes against, then either a new director will have to be proposed or after a 90day cool off period and adequate justification, the same director can be proposed again. However, in this second vote, all shareholders will vote once (no dual vote) and the disputed director will have to win 75% of shareholder votes. This new methodology will give significant veto powers to the minority shareholder base and ensure that unwanted directors cannot be forced on to the board.
Similar rules are proposed for any director who is to be removed. By giving minority investors effective veto rights over the removal of independent directors, we will hopefully protect them from undue promoter group influence. The new rules will balance the incentives more fairly and encourage genuine protection of minority shareholder rights. He also feels that directors shouldn’t simply walk away, with no reason, and wish away their responsibilities to the minority investors they were elected to protect. After the new rules, the promoter group cannot appoint an independent director as an additional director and not subject the appointment to shareholder approval for almost 12 months (until the next AGM).2) Parents, stop talking about the ‘Lost Year’
[Source: The New York Times
On and offline, parents are trading stories, poignant and painful, about all of the ways that they fear their middle schoolers are losing ground. “It’s really hard to put my finger on what happened exactly,” said Jorge Gallegos, whose son, Eyan, is in the seventh grade in Washington, D.C. When Eyan was in fifth grade, he had a lot of friends, Mr. Gallegos said. He was home schooled for sixth grade, and he seemed to thrive. But spending this year at home because of the pandemic has just been too much. Eyan transferred to a new middle school for seventh grade, where nearly all of the other students had started in the sixth grade, prepandemic. He hasn’t met any of his classmates in person, and he hasn’t made a single friend.
Eyan has told his parents that he’s lonely. So lonely, in fact, that he has started posting on Discord and Reddit. Sometimes, when he’s bored, he even starts chatting with those strangers during class time. Virtually everyone has waded through hardships this past year — job losses, relationship struggles, chronic stress and, in the worst of all cases, the loss of loved ones to Covid-19. And parents with school-age children have battled the demands of combining their usual work and family responsibilities with at least some degree of home-schooling. Experts say some of their worries are justified — but only up to a point. There’s no doubt that the pandemic has taken a major toll on many adolescents’ emotional well-being.
Remote learning and social distancing are in many ways the opposite of what children in this age group want and need. “It’s been hardest on middle schoolers,” said Phyllis Fagell, a therapist, school counselor and the author of the 2019 book “Middle School Matters.” “It is their job to pull away from parents, to use these years to really focus on figuring out where they are in the pecking order, figuring out what they need from a friend, what they can give to a friend. And all of that hard work that has to happen in these years was just put on hold.” Parents can’t just take a magic wand and sweep away their own mental health woes. But they can still help their children come out of this period feeling whole; they just have to be smarter about the way that they communicate. 3) How to start a new country
There are at least six ways to start new countries that have been publicly discussed. Three are conventional and three are unconventional. The traditional ones are known; election, revolution, war. But, the unconventional are: 1) Micronations:
The most obvious of the unconventional approaches – and the one most people think of when they hear the concept of "starting a new country" – occurs when an eccentric plants a flag on an offshore platform or disputed patch of dirt and declares themselves king of nothing. If the issue with elections is that too many people care about them, the issue with these so-called micronations is that too few people care.2) Seasteading:
Conceived by Patri Friedman and backed by Peter Thiel, seasteading essentially starts with the observation that cruise ships exist, and asks whether we could move from a few weeks on the water at a time to semi-permanent habitation on international waters (with frequent docking, of course). As the cost of cruise ships has fallen recently, this approach is becoming more feasible. But we haven't yet seen a working example. 3) Space:
Perhaps the most prestigious of the start-a-new-country paths is the idea of colonizing other planets. Unlike seasteading or micronations, space exploration started at the government level and has been glamorized in many movies and TV shows, so it enjoys a higher degree of social acceptability. People mainly think of it as currently technically infeasible rather than outright crazy.
There’s one more to it. Cloud countries. The idea is to proceed cloud first, land last. Rather than starting with the physical territory, we start with the digital community. We recruit online for a group of people interested in founding a new virtual social network, a new city, and eventually a new country. We build the embryonic state as an open source project, we organize our internal economy around remote work, we cultivate in-person levels of civility, we simulate architecture in VR, and we create art and literature that reflects our values. The main difference between cloud countries and the previous six (election, revolution, war, micronations, seasteading, and space) is that it straddles the boundary of practicality and impracticality. No one can claim that it's infeasible to build million person online communities or billion dollar digital currencies, or that it's physically impossible to architect buildings in VR and then crowdfund them.4) Can digital currencies and crypto investors help close India’s SME financing gap?
India is home to more than 60 million businesses, 10 million of which have unique GST registration numbers, most of them SMEs. However, of the one trillion USD worth of total commercial lending exposure of the banking system, only ~25% of it is provided to SMEs, which are considered less creditworthy than larger corporates or multinationals. This has resulted in a financing gap estimated to be between 250-500 billion USD, where meritorious businesses without national profiles aren’t able to access the capital they need to finance their growth. India’s next trillion in GDP growth depends upon solving this problem, but the incumbent financial system may not have the resources to fix it alone.
India does have assets with which to close the capital gap. It has a youthful population. It has a fast-growing economy, even given the setbacks of COVID-19. It has an enormous population of hundreds of millions of new internet users. And it has something new, which is the possibility of informational collateral as a sort of combination of traditional concepts of due diligence and physical collateral. Specifically, the SME funding gap is most pressing for the Indian cash-flow businesses that don’t have the physical assets to take out loans, which are the mainstay of the current, hard-collateral-backed credit system. One alternative is to use trustworthy digital records to ascertain whether a business is worthy of credit or equity investment. In addition to credit-based financing, the trustworthy records furnished by GST’s informational collateral can also support equity or quasi-equity financing, to support growth without increasing debt.Now the question arises:
what class of investors is most willing to use this newfangled type of informational collateral to invest in potentially high-risk businesses outside of the proven venues of America, Europe, East Asia and the large Indian enterprises? Who are the most risk-tolerant, international, forward-looking, class of investors in the world — willing to risk millions of dollars purely on the basis of internet diligence alone? It may turn out to be the new class of wealthy, globally-minded crypto investors. After all, the 10-year-old cryptoeconomy is now worth trillions of dollars, there are more than a hundred million crypto holders around the world, and there are at least fifty crypto protocols valued over one billion dollars, a “unicoin” analog to the traditional tech unicorn. While still small in comparison to global capital markets, a sector worth $2T that is growing at more than 100% per annum could become a much larger piece of the global financial puzzle in short order.5) Victory belongs to the team, defeat to the captain: Kumar Sangakkara
[Source: The New York Times
In this interview, the Sri Lankan cricket legend talks about the leadership lessons he has learnt from the cricket field. He starts by talking about his job at Rajasthan Royals. He says, “At this stage, you can’t make a complete overhaul—there is a structure in place and you have to work within that to fine tune it. We’ve got a lead assistant coach in Trevor Penney and some new choices at the auction. [What we’ve got to do] is set in place a culture of honest, open communication, a culture where making a mistake is absolutely fine as long as the intent aligns with the strategy, and allow the players a brand of cricket that plays to their individual as well as the team’s strength.”
Talking about key attributes of being a leader, he says “There are certain characteristics that you are born with that enable you to become a leader, but without learning and refining those and understanding that leadership is not about yourself but also others, you can’t be a true leader. You’ve got to understand that engendering leadership in others makes your job easy; it’s really difficult to have others follow you otherwise. Leadership is about stewardship and service—it’s about making others better. And your role as a leader starting from being a prominent one doing a great job goes into the background, because you would have enabled people to be better. That is the key to leadership.”
On decision-making, he says, “While making a decision, you have to accept that there can always be a chance of failure. In cricket, when I started, one of the first pieces of advice I got was that the only guarantee you’ll have as a batsman is that you’ll fail. But once you are aware of the risks, that’s when you strategise and pick the right people to do the job for you. Sometimes, your decision isn’t vindicated, but that’s the nature of leadership. You learn and move on. The fear of failure is natural in all of us. What it can’t do is paralyse you.”6) The silent rise of India’s private ports
In August 2020, Karan Adani, chief executive officer of Adani Ports and Special Economic Zone (APSEZ) and scion to the Adani group, informed stock analysts on an earnings call that his flagship port—Mundra, in the gulf of Kutch—had become the busiest port in the country. After nipping at the heels of its closest competitor for container traffic, JNPT (Jawaharlal Nehru Port Trust) at Navi Mumbai, for the last few years, Mundra finally pulled ahead in the first quarter of FY21, staging a faster recovery from the covid slump than the central government controlled JNPT could. Since then, Mundra has repeated this feat every subsequent month, consistently widening the gap in container volumes between itself and JNPT.
India’s port ecosystem is broadly divided into 12 major ports (controlled by the central government via the ministry of ports, shipping and waterways), a handful that are run as public-private partnerships, and countless minor ports, owned privately or by state governments, which dot the country’s 7,500-km long coastline. It is in these smaller, nimbler minor ports that much of the action lies. And the Adani Group has managed—in the span of just a few years—to corner nearly half of India’s minor ports capacity. The 12 major ports together handle about 55% of India’s cargo every year. However, incremental traffic growth at private ports is happening twice as fast as at these traditional strongholds.
Although current capacity utilisation at Indian ports hovers at just around the 60% mark—having been weighed down by a multi-year economic slump and a post-covid fall in demand—the government expects this trend to reverse soon. The Centre’s ₹1.7 trillion PLI scheme across 10 sectors is expected to boost the export competitiveness of India’s manufactured goods. When this comes to fruition, India’s ports need to be able to move cargo faster. “If India wants to be a $5 trillion economy, it can’t happen just within our geography, we need international trade," Arun Maheshwari, joint managing director and chief executive officer, JSW Infrastructure.7) What Sci-Fi can teach you about running a business
In his new book Skip the Line, James Altucher, host of the James Altucher Show podcast, relates lessons about life and business that he’s learned throughout his career. One of his biggest successes came from writing computer software to model the behavior of the stock market, an idea he got from Isaac Asimov’s Foundation series. “When I would pitch my strategy—because a big part of running a hedge fund is raising money, and you have to pitch your strategy—I would always ask people if they had read the Foundation series, because I would use that to explain my strategy,”
On time travel, he says, “Groundhog Day is an amazing movie. I think they theorize that he’s in the Groundhog Day 19,000 days in a row, give or take. He learns to play the piano like a master—he learns so many skills—and he becomes a better person as a result. In all of these science fiction movies, part of the point is that it doesn’t happen to someone special. It happens to someone mediocre, or even below mediocre, like Bill Murray in Groundhog Day. We can relate to that person who’s mediocre, who’s an everyday person, and we can speculate: ‘What would it mean for me?’ Watching Groundhog Day is almost like a safe way to experience those 19,000 days, and understand how I would learn, and how I would grow, and maybe I can learn those things now without spending those 19,000 days.”
Talking about artificial intelligence, he says, “AI is a different beast, computers are not humans. A computer processor does not act in any way like a brain. There’s nothing about computers that would make me think suddenly one’s going to become conscious. If that’s true, it’s at least a thousand years away. … The only reason people say, ‘Oh, one day AI will wake up,’ is because it was a branding thing in the ’80s. The Department of Defense was throwing money at any academic computer project that was working on ‘artificial intelligence,’ because they thought this was about, ‘OK, we’re going to have robots as soldiers, and the Terminator is going to be a soldier.’ But [the idea of AI waking up] is ridiculous.”8) The easiest way to solve tough problems is also the one we usually think of last
Ask a dozen different people for advice and you may get a dozen different suggestions. According to a much buzzed-about new study recently published in Nature, humans have a pervasive bias to add things on when searching for solutions--and that's causing us to miss out on a whole lot of great ideas. After engineer Leidy Klotz noticed that people tend to add additional features when trying to solve problems, he recruited his colleague, psychologist Gabrielle Adams, to investigate the phenomenon. Through a series of experiments involving everything from stabilizing Lego structures to making abstract shapes symmetrical, the researchers confirmed that, whatever the problem, people tend to add elements rather than take away existing ones.
"Additive solutions have sort of a privileged status--they tend to come to mind quickly and easily," sums up study co-author Benjamin Converse. "Subtractive solutions are not necessarily harder to consider, but they take more effort to find." In short, left to your own devices you and your team will probably do what comes naturally when faced with a problem--and what comes naturally to humans is to add more complexity. That means your company is probably missing out on simpler, cheaper, and more innovative solutions, and creating unnecessary bloat and bureaucracy in your products and systems. The research suggests that putting people under less time pressure and helping them focus should help correct for this bias.
One might wonder if optimizing for speed might generate just the sort of time pressure the researchers suggest pushes people to favor addition over subtraction, but the larger takeaway is that smart leaders are aware of people's tendency to add complexity and think through how to ensure minimalist solutions get fair consideration too. Just being aware of this bias and discussing how best to create a culture that values simplicity is probably a good place to start. And if you're looking for more ideas, Klotz's new book, Subtract: The Untapped Science of Less, probably has plenty of suggestions. 9) Web inventor Tim Berners-Lee thinks his creation is out of control. Here’s his plan to save it
[Source: Science Focus
In 1989, while tinkering with a system to share scientific notes, a 34-year-old CERN scientist named Tim Berners-Lee invented something that would change everything. The World Wide Web. But he is on a separate mission now, pertaining to privacy. In the wake of the Cambridge Analytica scandal – in which the data of 87 million Facebook users was obtained without consent – Tim Berners-Lee, has led numerous campaigns persuading governments to act. In this interview, he answers a few questions about online privacy, his invention, fixing the internet, etc.
Talking about his invention, he says, “Ten years ago I would have said that humanity uses the web and if you look at humanity you’ll see good and bad stuff. However, at a certain point, around 2016 [circa the Facebook-Cambridge Analytica data scandal], I realised it’s all very well if people I know are honing their bookmarks to have reliable, scientifically-based information, but there are a lot of people I don’t know who have very different bookmarks. They could be reading all kinds of stuff that isn’t true, and if it wasn’t for democracy then I would have been happy for them to go on reading. But because they vote, we require more from the web – and certainly more from social networks. They have a duty, because we need informed voters who can participate in the debate.”
Is it too late to fix the internet? He says, “It’s amazing how quickly things can change. Years ago people were worried that Netscape dominated every browser. And then Microsoft came along with Explorer, which became dominant. And then everyone worried about that until many other browsers emerged. And today people are saying “Oh no, everyone’s using the same search engine!” Well, problems can pass. In general, the web has been incredibly good at demonstrating that lovely though the walled garden might seem, the outside jungle is more valuable. The dominant thing is always innovation and creativity.”10) What human resources will look like in 2030
[Source: Women’s Agenda
The author of this article asks Australia’s top HR experts to peer into their crystal balls and predict the future of the industry. Surely, the pandemic has changed everything around the world, and some changes are here to stay for long or forever. “In the last 20 years, I’ve seen the HR industry transform from being all about recruiting, compliance, checklists and health and safety regulations to being about building and leveraging human potential in business,” says Karen Gately, who worked as a HR director for eight years before launching her leadership consulting practice 16 years ago. “The old-fashioned command and control approach to leadership is dying out and the future of HR will be leading with authenticity.”
“Flexible work practices are no longer a competitive advantage; they’re the baseline expectation,” says Gately, noting that productivity has skyrocketed since more people started working from home. The biggest change facing human resources in the near future is managing remote workforces, finding new ways of working as a team and building culture from afar. While fostering a happy workplace has always been a part of the job description, HR representatives have had to completely overhaul the way they do so. “My biggest focus right now is culture,” admits Dr. Stacey Jenkins, the Acting Head of the School of Management and Marketing at Charles Sturt University. “I’m trying to be more in touch with how staff are feeling, more aware of their change fatigue and more available to provide motivation to keep them engaged.”
Casual Fridays will soon be an everyday option, says Gately and Dr. Jenkins. Dr Jenkins goes as far as saying ditching homogenous office dress codes will help teams with their aforementioned, all-important emotional wellbeing. “I’m a big believer in respecting diversity and allowing people to dress the way they want; whether that be a pretty dress or trackies and a hoodie,” she says. As HR teams wave goodbye to dress codes, they’re eager to welcome real inclusion and diversity. “Of course, organisations need to have a diversity policy and strategy, but it needs to become a key strategic goal. We must take concrete steps to address unconscious bias, move past tokenism and embrace meaningful change,” explains Dr. Jenkins, listing blind resume screenings as a practical way to do just that.