GS4 · 20 marks · 250 words
You are the Chief Compliance Commissioner at the National Startup Governance Board (NSGB)—a regulatory authority under the Ministry of Corporate Affairs, tasked with ensuring ethical practices, board accountability, and investor transparency in India's startup ecosystem. Five years ago, "EduNow", an ed-tech startup founded by an alumnus of a premier college of India, was celebrated as a beacon of India's digital future. With a bold mission to democratize learning for rural students, it grew rapidly—partnering with schools, onboarding millions of users, and securing funding from global investors. But today, EduNow is imploding under the weight of governance failure. Auditors have resigned, citing withheld information, inflated revenues, and fabricated subscriber data. Several board members quit silently, without public explanation. Employees allege mass layoffs through WhatsApp, non-payment of dues, and coercion to sign NDAs in exchange for exit compensation. A leaked internal report reveals Personal expenses of the founder were booked as business expenses, Related-party transactions with shell companies owned by family members, Manipulation of user metrics to secure higher valuations in funding rounds. Despite these, the founder retains full operational control and is preparing for a new fundraising round, even considering an IPO. Meanwhile, a 27-year-old EduNow sales executive dies by suicide, allegedly due to unethical sales pressure and denial of salary for six months. His handwritten note, now viral, reads, "I believed in the dream. But I was punished for asking for my salary. What future does honesty have?" Public anger is erupting. Parents, students, and employees feel betrayed. Investors are distancing themselves. The media is asking tough questions. You are called for an emergency press conference in 6 hours. (a) As the Chief Compliance Commissioner, list your top five immediate ethical decisions. (b) Suppose the founder be forced to resign, and you are given the charge. What systemic changes that you would introduce? (c) Should companies that deliver public services (like EduRise in education) be subject to stricter governance norms than typical startups? OR Should startups be exempt from the same governance norms as large listed companies to encourage growth?
Answered by 1 topper · CSE 2025
Syllabus: Case Studies on above issues.
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