Indian corporate boards must address deeper behavioural, strategic gaps to be future-ready

New Delhi, Jan 5 While Indian corporate boards are structurally sound, inclusive and committed to stewardship, they must address deeper behavioural and strategic gaps to become truly future-ready, a report said on Monday.

The report by the Indian School of Business (ISB) has called for Indian corporate boards to move beyond compliance and play a more strategic role in shaping the country’s corporate future.

The findings show that only 17 per cent of boards play an active role in shaping company strategy, while the others 83 per cent play a more passive role.

More than one in three (36 per cent) admit their boards provide limited or no input beyond reviewing management’s plans.

“Effective oversight requires directors to go beyond compliance, anticipate risks, and guide management with foresight and conviction. As India’s corporate sector expands globally, boards must evolve from passive monitors to active stewards of long-term value creation,” said Sanjay Kallapur, Professor of Accounting at ISB.

The report is based on a comprehensive survey of over 200 directors from BSE 500 companies. It assesses governance maturity across three dimensions — guidance and oversight, board functioning, and leadership — and examines the effectiveness of key committees including audit, risk management, and nomination and remuneration.

Professor Madan Pillutla, Dean, ISB, in his foreword, said the survey “shines a light on patterns of behaviour, decision-making, and leadership that determine whether boards merely comply or truly govern.”

The study also highlights that only 27 per cent of directors seek information from independent sources, creating an “echo chamber” that can stifle dissent and increase the risk of groupthink.

“True governance maturity lies in fostering boardrooms that value preparation, perspective, and the courage to ask difficult questions,” said Nirmalya Kumar, Visiting Professor of Strategy at ISB.

Leadership and committee effectiveness also emerge as critical gaps. While audit committees are strong on financial vigilance, their engagement on whistleblower and behavioural issues remains limited, the report mentioned.

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