Corporate board: The governance compass

At the recent Annual Directors' Conclave, Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey delivered his assessment of Indian boards, urging them to swap ceremonial formality for intellectual grit.

- AMIT TANDON

His central metaphor was that companies are ships with CEOs at the helm, but who watches the compass for "ethical fog" and "regulatory icebergs"? Governance, in his view, is less about ticking boxes and more about steering a corporate "ship" through geopolitical squalls, technological disruption, and fickle public opinion.

Despite India's robust regulatory framework—strengthened by the 2013 Companies Act and Sebi's listing regulations—the chairman identified a troubling gap between structure and spirit. While the governance foundation is sound, boards too often confuse "compliance with culture." Independent directors are appointed but do not feel empowered; diversity is counted, not heard. Too many treat governance as mere box-ticking rather than living the values, serving as "honorary appointees" rather than genuine stewards of accountability.

Boardrooms should not be comfortable places: Mr Pandey prescribes four key shifts for corporate governance: Treat culture as seriously as balance sheets; recruit independent directors from beyond cosy networks, and equip them to dissent; harness technology for real-time risk dashboards; and embrace cognitive diversity to provoke better decisions. "A board that never disagrees is not aligned—it's asleep," he said. The boardroom, as the governance adage tells us, should not be a comfortable place.

The boardroom of the future, according to him, should be a learning organisation that earns trust by asking uncomfortable questions. In an era of AI-driven decisions and viral reputational risks, analogue boardroom tools prove inadequate. The real governance test comes not during steady growth but when crises strike. Then, governance is measured not by policy manuals, but by the calibre and courage of those around the table.