Why India must stop learning corporate lessons from America Inc.

Last week, a US state court delivered a $375 million verdict against Meta Platforms Inc., finding the company used unfair, deceptive, and unconscionable trade practices by failing to protect children from sexual predators on its platform. In a press release, the Attorney General said that “Meta executives knew their products harmed children, disregarded warnings from their own employees, and lied to the public about what they knew.”

As crimes go, that should rank among the most egregious. But here’s the context that makes it truly damning: $375 million is less than what Meta earns in a week. In a separate case in Los Angeles, Meta’s internal documents read aloud in court coldly strategised “if we wanna win big with teens, we must bring them in as tweens”. This is not negligence but a deliberate business model.

It would be easy to treat this as one company’s failure. But Meta’s sin is one in a long line. Boeing Co.’s quality culture collapsed so thoroughly that a door plug blew out mid-flight. Purdue Pharma helped engineer an opioid epidemic that killed thousands. Theranos defrauded investors and patients for years in plain sight. The pattern is consistent enough to suggest it is structural: American corporations have perfected the art of scaling fast, externalising harm, and shrugging off regulatory penalties as just another line item.

For Indian business, the uncomfortable question is why have we spent three decades treating this system as the model to emulate?

The reverence has its roots in the post-liberalisation era when Indian boardrooms operated with what might charitably be called an imported inferiority complex.

General Electric Co. under Jack Welch was canonised in business schools. Consulting firms sold shareholder value maximisation as corporate gospel. Embarrassingly, even Enron was briefly celebrated as visionary before it collapsed in one of the largest accounting frauds in corporate history. GE too unravelled under the weight of Welch’s financial engineering. The 2008 financial crisis should have been the definitive verdict on Business America, but it wasn’t. As the pilgrimage to free enterprise continued, a new generation of Indian founders absorbed not just the methods but the attitudes of Western business leaders. The result: regulatory hostility, governance-as-afterthought and the cult of the founder-as-genius.

The consequences are beginning to show. Byju’s journey followed the American playbook with textbook fidelity. Hyper-growth funded by credulous capital meant that compliance was treated as an irritant, and founders were insulated from accountability until the whole structure crumbled. What’s particularly dispiriting is that today’s Indian startup heroes are not patient institution-builders but provocateurs. Elon Musk’s contempt for regulators gets cosplayed as boldness while Peter Thiel’s hostility to democratic oversight passes for vision.

This is the moment for Indian regulators to assert that the US model of corporate governance is not worth copying. What it has produced, even at its most successful, is extraordinary wealth concentration, chronic underinvestment in productive capacity, and companies so large and politically connected that regulation becomes largely theatrical.

India, with its mass employment imperative and institutional memory of unaccountable corporate power, needs an architecture written for local conditions.

Some pointers already exist. India’s mandatory CSR framework, the only one of its kind in the world, needs to be deepened rather than diluted. Beyond that, two further interventions are overdue. Listed companies should cap the ratio between CEO compensation and median worker pay—a gap that in some Indian firms now exceeds 400 to 1, with no demonstrable improvement in corporate performance to justify it. Regarding personal liability, Indian law should go where American law rarely does in practice: making founders and directors criminally, not just civilly, accountable for systemic misconduct.

None of this is anti-growth. In fact, it is a precondition for durable growth. Jamsetji Tata built steel plants, funded universities and created institutions that have outlasted him by over a century. Verghese Kurien turned a small dairy cooperative in Anand into Amul which outcompetes multinationals by distributing value to three million farmers who are also its owners. Neither man was running a charity. Both understood that a business earns its longevity by binding its fortunes to the society around it.

Meta’s fine will generate a news cycle and recede. The larger story is a global reckoning with the assumption that corporations can harm without lasting consequence. India still has the regulatory bandwidth, the democratic mandate, and enough of its own business tradition to know the difference between building a company and strip-mining one.

In Company Outsider, Sundeep Khanna distills more than three decades of his experience writing on India Inc. into a thousand words of context and insights that few can bring to the table. Want this newsletter delivered in your inbox? Subscribe here.