Trusteeship vs Leadership: The Indian Context - A Model for Sustainable and Inclusive Growth
Each and every one of you should consider himself to be a trustee for the welfare of the rest of his fellow laborer's and not be self-seeking - Mahatma Gandhi
Table of Content
Introduction to Trusteeship vs Leadership.
Trusteeship in India: A Model for Sustainable and Inclusive Growth.
How is trusteeship different from leadership?
Trusteeship in India: Applying Public and Private Concepts for Sustainable and Inclusive Growth.
4 Successful Examples of Trusteeship in India.
Trusteeship as a Solution for the Crisis of Failing Leadership in Startup Eco-space: A Model for Sustainable and Inclusive Growth.
5 Major Shortcoming of Trusteeship.
2 Failed Implementations of Trusteeship in India.
10 Recommendations for Organizations to Adopt the Trusteeship Model.
Conclusion.
Introduction to Trusteeship vs Leadership
Each and every one of you should consider himself to be a trustee for the welfare of the rest of his fellow laborer's and not be self-seeking - Mahatma Gandhi
In today's fast-paced world, the traditional concept of leadership is being challenged like never before. With scandals and ethical lapses on the rise, it's becoming increasingly clear that a new approach is needed to ensure accountability, transparency, and sustainability in organizations. In India, the concept of trusteeship is gaining traction as a potential solution. Trusteeship is a model that emphasizes collaboration, inclusivity, and social responsibility, and it's being used by companies and organizations to balance the interests of different stakeholders while pursuing long-term goals.
With the topic, "Trusteeship vs Leadership: The Indian Context", we'll explore the concept of trusteeship in the Indian context, highlighting its differences from traditional leadership and its potential benefits and challenges. We'll also discuss how trusteeship can help address the current crisis of failing leadership and declining institutional trust, and why it's worth considering as a model for organizations and communities everywhere.
Trusteeship in India: A Model for Sustainable and Inclusive Growth
Sustainable development requires human ingenuity. People are the most important resource-Dan Shechtman
In India, the concept of trusteeship has emerged as a way to balance the interests of different stakeholders while pursuing long-term goals. The idea is that individuals and organizations are not owners of their resources but trustees who hold them in trust for the benefit of all stakeholders. This concept has been popularized by Mahatma Gandhi and is being increasingly adopted by companies and organizations in India.
Trusteeship is not a new concept in India. In fact, it has been a part of Indian culture and tradition for centuries. The concept of trusteeship is deeply rooted in the Hindu philosophy of dharma, which emphasizes the importance of duty and responsibility towards society. According to this philosophy, individuals and organizations have a moral obligation to use their resources in a way that benefits society as a whole.
The concept of trusteeship has gained renewed interest in recent years due to its relevance in the modern business context. With growing concerns about corporate social responsibility and sustainable development, many companies and organizations are turning to trusteeship as a way to balance the interests of different stakeholders and promote long-term growth. By adopting a trusteeship approach, companies can build trust with their stakeholders and create a more sustainable business model.
In addition to its relevance in the business context, trusteeship has also been embraced by social activists and non-profit organizations in India. Many of these organizations are using the concept of trusteeship to promote social justice and empower marginalized communities. By adopting a trusteeship approach, these organizations are able to work towards their goals while ensuring that the interests of all stakeholders are taken into account.
How is trusteeship different from leadership?
As we look ahead into the next century, leaders will be those who empower others – Bill Gates
Trusteeship and leadership differ in their approach and goals. While leadership aims to achieve goals in a top-down manner, trusteeship emphasizes collaboration, transparency, and accountability to balance stakeholder interests. Trusteeship complements leadership by promoting long-term thinking, inclusivity, and social responsibility.
Trusteeship and Leadership: While the concepts of trusteeship and leadership are often used interchangeably, they are different in their approach and goals.
Leadership: Leadership focuses on achieving specific goals, often through a top-down approach. The leader is in charge and makes decisions that are best for the organization or company, often without input or collaboration from others. The primary goal is to achieve the desired outcome as quickly and efficiently as possible.
Trusteeship: On the other hand, trusteeship emphasizes collaboration, transparency, and accountability, with the goal of balancing the interests of all stakeholders. The concept of trusteeship is based on the idea that individuals and organizations are not owners of their resources, but trustees who hold them in trust for the benefit of all stakeholders. The primary goal is to promote long-term thinking, inclusivity, and social responsibility.
Trusteeship in India: Applying Public and Private Concepts for Sustainable and Inclusive Growth
Government is a trust, and the officers of the government are trustees. And both the trust and the trustees are created for the benefit of the people - Henry Clay
The concept of Trusteeship in India is not limited to the private sector but also applies to the public sector. In the context of public governance, Trusteeship refers to the duty of the government to act as a trustee and ensure that public resources are used for the common good. This concept is deeply rooted in Indian tradition and has been an integral part of Indian governance for centuries.
Types of Trusteeship Concept in India
There are two major concepts of trusteeship in India, along with a third and new concept.
Private Trust: A private trust is created by a settler for the benefit of specific individuals as beneficiaries, such as relatives and friends of the settler.
Example of Private Trusteeship:
In the private sector, Trusteeship has been adopted by several Indian business groups, including the Tata Group, Godrej Group, Bajaj Group, and Wipro Group. These groups have embraced the concept of Trusteeship as a way to promote social and environmental responsibility and build trust with stakeholders.
Public Trust: A public trust benefits the public or a specific group. The beneficiaries can include the general public, but a public charitable trust must be for charity and have public beneficiaries, even if not the general public. Identifying the public as beneficiaries can be difficult.
Example of Public Trusteeship:
Trusteeship in public governance is exemplified by the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which provides employment opportunities to rural households in India. The act was introduced in 2005 with the aim of addressing poverty and unemployment in rural areas. Under this act, the government acts as a trustee of public funds and ensures that the funds are used for the benefit of rural households.
Public Private Partnership Trust: The PPP Trusteeship model involves collaboration among the government, private sector, and civil society for the common good. The government serves as a trustee, while the private sector brings capital and expertise to complete projects effectively. Civil society holds trustees accountable. PPP Trusteeship leverages the strengths of all stakeholders, with the government providing regulatory and administrative expertise, the private sector contributing capital, technology, and management skills, and civil society ensuring transparency and accountability. PM Modi champions PPP Trusteeship and sees its potential to transform the Indian economy, particularly in infrastructure, healthcare, education, and agriculture.
Example of PPP Trusteeship:
The "Namami Gange" project is a partnership between the government and private sector under the PPP Trusteeship model. The project aims to clean the Ganges River.
The "Ayushman Bharat" project provides health insurance to the poor and is another example of PPP Trusteeship in action.
4 Successful Examples of Trusteeship in India
You only have to do a few things right in your life so long as you don’t do too many things wrong – Warren Buffett.
The success of companies like Tata Group, Amul, Infosys, and Wipro, who prioritize the interests of all stakeholders, demonstrates how trusteeship can lead to long-term success and social development.
In this article, we'll explore some trusteeship in India and the benefits it has brought to these organizations and their stakeholders.
Tata Group: Founded in 1945 by Jamsetji Tata, the Tata Group prioritizes stakeholders, including shareholders, employees, and the community, reflecting a tradition of social responsibility. The company is renowned for its philanthropic initiatives, such as the Tata Trusts, which have contributed significantly to India's social development.
Amul: Anand Milk Union Limited (AMUL), a cooperative of milk producers in India, is a successful example of trusteeship. Its shared ownership and decision-making model, along with strong collaboration between members and management, has enabled it to become one of India's largest dairy companies.
Infosys: Infosys, a tech company, prioritizes social responsibility through the trusteeship model. Founder Narayana Murthy puts stakeholders first: customers, employees, and shareholders. Infosys contributes to India's social development through education, healthcare, and environmental initiatives.
Wipro: Founded in 1945 by Mohamed Premji as Western India Vegetable Products Limited, later abbreviated to Wipro, this is a global tech company that follows a trusteeship model built on shared ownership and decision-making. The company is socially responsible, with initiatives in education, healthcare, and the environment contributing to India's social development.
Organizations like Tata Group, Amul, Infosys, and Wipro has prioritize the interests of all stakeholders, which has led to long-term success and social development.
Trusteeship as a Solution for the Crisis of Failing Leadership in Startup Eco-space: A Model for Sustainable and Inclusive Growth
Trusteeship, a concept rooted in Indian ethos, can be a solution to the leadership crisis faced by organizations, especially in the Indian startup eco-space. It is based on shared responsibility and stewardship, where the trustee manages the assets and interests of all stakeholders. Trusteeship promotes collaboration, inclusivity, and social responsibility and has the potential to shape the new age India startup ecosystem.
Startup Village and TiE (The Indus Entrepreneurs) are examples of successful trusteeship in the Indian startup ecosystem.
Startup Village is a technology business incubator located in Kochi, Kerala, built on the principles of trusteeship. It provides mentorship, infrastructure, and funding to startups, and encourages collaboration and knowledge sharing among its members. Startup Village has created a vibrant startup ecosystem in Kerala, and its model has been replicated in other parts of India.
TiE is a non-profit network that promotes entrepreneurship and innovation through education, mentoring, and networking. It connects successful entrepreneurs, investors, and other stakeholders to offer mentorship, networking opportunities, and access to funding for startups. TiE has created a lively ecosystem that supports the growth and development of startups.
5 Major Shortcoming of Trusteeship
Despite its potential benefits, trusteeship is not without its shortcomings. In this article, we'll explore some of the shortfalls of trusteeship and why it's essential to consider them before adopting this model in any organization.
In this article, we'll explore some of the shortfalls of trusteeship and why it's essential to consider them before adopting this model in any organization.
Limited accountability: Trusteeship can create limited accountability. In this model, trustees act as custodians and make decisions on behalf of all stakeholders, leading to a diffusion of accountability with no clear line of responsibility. While transparency and collaboration are emphasized, the lack of clear accountability is problematic.
Potential conflicts of interest: Trusteeship can lead to conflicts of interest as the trustees are responsible for managing the organization's resources and making decisions that benefit all stakeholders. However, their personal relationships or interests may influence their decisions, resulting in choices that do not benefit everyone involved.
Slow decision-making: Trusteeship can slow decision-making in a fast-paced business environment. Emphasis on collaboration and consensus-building can lead to lengthy debates and hinder quick decisions. This can result in better decisions, but can be a disadvantage in a competitive market where quick decision-making is essential.
Difficulty in implementation: Trusteeship requires a cultural shift in organizations towards collaboration, inclusivity, and social responsibility. This may not align with the traditional culture of many organizations, and requires a commitment from all stakeholders. Achieving this shift can take time.
Risk-averse decision-making: Trusteeship can lead to risk-averse decision-making, prioritizing short-term goals over long-term gains or avoiding risks altogether. While useful in some contexts, this approach can limit innovation and hinder competition.
In conclusion, while it has its potential benefits, trusteeship is not without its shortfalls. These include limited accountability, potential conflicts of interest, slow decision-making, difficulty in implementation, and risk-averse decision-making. It's essential to consider these shortfalls before adopting trusteeship in any organization and to ensure that it aligns with the organization's goals, values, and culture.
2 Failed Implementations of Trusteeship in India
It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently - Warren Buffett.
While successful examples exist, failed instances expose challenges of this model. With the limitations as discussed above.
In this article, we'll explore some examples of failed trusteeship in India and the lessons we can learn from them.
IL&FS: Was an Indian company that failed in 2018 due to unmanageable debt, leading to a liquidity crisis in India's financial system. The board of trustees failed to oversee the company and mitigate financial risks. This shows the importance of effective governance and risk management in trusteeship.
Amrapali Group: In 2019, India's Amrapali Group, a prominent real estate developer, collapsed, leaving buyers without homes or refunds. The company's founders claimed to be acting in the best interests of all stakeholders using trusteeship, but their actions did not align with buyers' interests. This emphasizes the importance of accountability and transparency in trusteeship models, particularly in real estate where buyers are at risk.
Successful and failed examples show the importance of accountability, transparency, governance, risk management, and stakeholder alignment. We must learn from these failures and ensure that any trusteeship is based on these principles to be effective.
10 Recommendations for Organizations to Adopt the Trusteeship Model
The trusteeship model is a concept that organizations can adopt to ensure that they are accountable to all of their stakeholders, including the environment and future generations. Here are ten recommendations that organizations can follow to successfully adopt the trusteeship model:
Establish a clear vision and mission statement that reflects the organization's commitment to the trusteeship model.
Identify all stakeholders, including the environment and future generations, and involve them in decision-making processes.
Develop a comprehensive sustainability strategy that prioritizes the protection of the environment and the well-being of future generations.
Implement sustainable practices throughout the organization, including in the supply chain, operations, and products/services offered.
Engage with stakeholders to identify their needs and expectations, and incorporate these into decision-making processes.
Regularly communicate with stakeholders to keep them informed of the organization's progress towards sustainability goals.
Establish a system for monitoring and reporting on sustainability performance, and use this information to continuously improve.
Provide training and education to employees and stakeholders on sustainable practices and the importance of the trusteeship model.
Collaborate with other organizations and stakeholders to drive collective action towards sustainability goals.
Continuously review and update the organization's sustainability strategy and practices to ensure they remain relevant and effective in achieving the trusteeship model.
Organizations seeking to adopt Trusteeship as a leadership model should focus on building trust among all stakeholders through transparent communication, ethical practices, and a strong commitment to social and environmental responsibility. Additionally, leaders should be willing to share power and decision-making authority.
Conclusion
To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity – Douglas Adams.
Trusteeship is a concept that has gained popularity in India as a way to balance the interests of all stakeholders and promote social justice. However, it is not without its limitations and potential shortfalls. Some of these include limited accountability, potential conflicts of interest, slow decision-making, difficulty in implementation, and risk-averse decision-making. Failed examples of trusteeship in India, such as IL&FS and Amrapali Group, highlight the importance of accountability, transparency, governance, risk management, and stakeholder alignment in effectively implementing trusteeship.
Despite these shortcomings, there are successful examples of trusteeship in India that demonstrate its potential benefits. Companies like Tata, Infosys, Amul, and Wipro have prioritized the interests of all stakeholders, leading to long-term success and social development. These companies have embraced the concept of trusteeship as a way to promote social and environmental responsibility, build trust with stakeholders, and create a more sustainable business model. Their success shows that effective trusteeship can lead to increased loyalty and financial success in the long term.
In addition to established companies, trusteeship can also benefit the new age startup ecosystem in India. By adopting a good trusteeship model, startups can receive guidance and mentorship from experienced leaders who prioritize collaboration, inclusivity, and social responsibility. This can help address the crisis of failing leadership and declining institutional trust, and promote sustainable and inclusive growth in the startup ecosystem.
Takeaway
Although trusteeship has limitations, it can lead to social responsibility, stakeholder trust, and long-term financial success. Successful examples of trusteeship in India show that adopting a good model can benefit organizations of all kinds, from established companies to startups, through increased collaboration, inclusivity, and social responsibility, leading to sustainable and inclusive growth.
We would love to hear your thoughts on the concept of trusteeship and how it can be implemented in organizations. Please feel free to engage in a discussion and share your ideas on how trusteeship can be used to promote sustainable and inclusive growth. Together, we can build a better future for all stakeholders.
Weldefined
Effective leadership requires knowing how to build and keep trust..