Tête-à-tête with Dr. Mukund Rajan, Chairman E Cube Investment Advisors.


Ramdas Shenoyy in conversation with Dr. Rajan on Ethics, Branding, ESG standards in India and life outside Tata Group.

How is it different to lead a venture outside Tatas after more than 2 decades of association with the Tata group?  What is E cube Investment Advisors? your vision and the impact it is looking for?

The venture I am involved with at E Cube Investment Advisors leverages the learnings and understanding of the Indian corporate landscape of the three Founders, including myself.  All of us have been associated closely with the Tata Group and are now seeking to deploy our skills and experience to catalyze the adoption of higher Environment, Social and Governance (ESG) standards by Indian businesses. 

We are very excited about the opportunity to make a difference, much needed at a time when India is not only seeing economic damage caused by the outcome of widespread corporate misconduct, but also the adverse impact of multiple social and environmental issues. As an entrepreneurial venture, we obviously have to rely on the resources the Founders and other team members have pulled together, and while we are no longer working under the umbrella of a giant corporate-like Tatas with massive resources, we do believe the several hundreds of years of senior leadership experience we have brought together allows us to create a very substantial impact.  Ultimately, the change we wish to bring about has to be led by the companies we invest in, and our task is to mentor, guide and support the promoters and top management in these companies which we believe will become role models for Corporate India.  Our first fund will invest in the public markets, backing small and mid-cap companies that are led by visionary promoters who have a serious intent to improve their ESG performance.  Over time, we would launch multiple products to address different asset classes, including debt and private equity.               

Environment, Social and Governance issues are paradoxical considering the global capitalism philosophy. Does Conscious Capitalism really work?

Absolutely.  Globally, a series of corporate debacles since the early 2000s at companies like Enron, followed by the financial crisis of 2008-9, have served to demonstrate the importance of deep stakeholder engagement with a focus on the long-term.  This is also the reason recently the Business Roundtable in the US, which has many of the largest US corporations as its members, advised its shift in stance in defining corporate purpose.  From a perspective that emphasized “shareholder primacy”, the Business Roundtable has moved to the view that “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”.  A glance at the comparative performance of public equities that are ESG leaders versus the benchmark indices across many countries also shows that the risk-adjusted returns are higher in companies that take corporate responsibility seriously.  In India, the MSCI India ESG Leaders Index has seen a steady widening of the gap with the MSCI India Index.    

How critical is ethics in Corporate governance?

It is absolutely vital.  Many of the cases of corporate bankruptcies in India are the result of unethical conduct and poor corporate governance, and their impact on the banking system and the wider economy has been hugely negative.  A number of criminal cases are consequently being pursued by the law enforcement agencies against corrupt promoters and managers.  The tone at the top is exceedingly important, and sadly, in too many Indian companies, poor examples have been set by corporate leaders.  

How can brands be trusted today? How can they be built? 

It all starts with having a clear sense of who you are and what you stand for.  The mission and values must be understood and reinforced across the entire organization.  Employees, in particular, are the best brand ambassadors for any organization, and if they are not fully aligned, a lack of coherence gets detected that puts off many outside stakeholders.  The tone at the top and how an organization walks the talk are also very important; on important Environment, Social and Governance (ESG) questions, business leaders will be expected to demonstrate genuine commitment.  In a world where internet access is ubiquitous and stakeholders are extremely aware and informed, companies and business leaders that make exaggerated claims of performance will get called out very fast with an associated loss of reputation.  If the mission and values can be established and fed into brand communication, it will enjoy a measure of authenticity.  To the extent that these values resonate with those of the brand’s stakeholders including customers, the brand gains traction.  Increasingly for customers, it is not just about what they buy, but what they buy into; if the brand values are believable, customers are willing to commit their loyalty.  This is the reason that purpose-driven brands like Patagonia and The Body Shop have large fan followings. 

Your advice to young aspirants who want to be Corporate leaders and to senior professionals who want to sustain, grow and remain relevant in the dynamic world

To young aspirants, one will say aim high and keep developing your skill-sets and seeking new experiences.  Learn to work in teams and to draw the best out of your colleagues and those who may be subject matter experts in areas you do not fully comprehend. Only through continuous learning and skills up-gradation, alongside the ability to motivate your colleagues at work, will you be able to rise to the top of the corporate ladder.

To senior professionals also, one would counsel the importance of continuous learning, so as to stay engaged and connected with the latest developments in your business.  Be willing to accept advise and mentorship even from those younger or less experienced than you in your quest for improving your learning and knowledge.

Do you see India becoming a 5Trillion Economy by 2025? What does she need to do to achieve that goal?

On the current form, and in the context of the additional pressures we are witnessing thanks to the spread of the Corona Virus, it is likely that the date for achieving a $5 Trillion economy will move out in time.  Enough has been written by economy experts about the reform measures that are required to give additional momentum to growth – everything ranging from land and labour reforms to significant investments in skills development.  Two points I would like to specifically underline, though, are first, the need for Corporate India to enhance its investments in R&D and innovation.  Without far greater investments in creative new products and services, we risk being left behind the rest of the world and being condemned forever to being followers of trends in other markets.  Second, we need to see far greater formal inclusion of women in the workplace, compared to the low percentage of around 24% we currently witness.  More women in the workplace will not only significantly increase our GDP, but also address many negative social issues in India.           

Who has been your Idol and what is your motto of life?

I have seen too many leaders with feet of clay to place any living persons on a pedestal!  However, if one looks to the past, I have been a great admirer of Mahatma Gandhi.  His life was his message, and we may never find again a leader like him – someone who could be open about and accept his own frailties, reject the greed for power, set an example of self-sacrifice, and through all this, motivate hundreds of millions of countrymen to do better and succeed in their fight for freedom.    

My motto in life is “no regrets”.  The grass always looks greener on the other side, and it is, therefore, best to not regret what has passed but instead to look to the future and keep setting new goals for yourself.

About Dr. Rajan

Dr. Rajan is the Chairman of ECube Investment Advisors, which is launching in partnership with Quantum Advisors a new Environment, Social and Governance (ESG) fund, the Q-ECube India ESG Fund, which will invest in the Indian public markets.  Prior to this, he held a number of senior executive positions through his 23-year career with the Tata group, including Chief Ethics Officer of the Tata group, the first Brand Custodian of the Tata group, head of the foreign offices of Tata Sons, Chair of the Tata Global Sustainability Council, Member of the Group Executive Council at Tata Sons, Head of Private Equity at Tata Capital, and Managing Director of one of the group’s listed telecom businesses. He served on the boards of various Tata companies including Tata Teleservices, Tata Communications, Roots Corporation, Piem Hotels, Tata SIA Airlines, Tata AIG, and the TCS Foundation. In 2007, the World Economic Forum honoured Dr. Rajan as a Young Global Leader. He was also part of the inaugural class of the CII-Aspen Institute India Leadership Initiative.

Dr. Rajan graduated from the Bachelor of Technology program at the Indian Institute of Technology, Delhi in 1989. He received a Rhodes Scholarship to study at Oxford University, where he completed a Masters and Doctorate in International Relations. His doctoral dissertation titled “Global Environmental Politics – India and the North-South Politics of Global Environmental Issues” was published by Oxford University Press in 1996, and his second book, “The Brand Custodian” was published by HarperCollins in 2019.

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