The Securities and Exchange Board of India (Sebi) will undertake a joint initiative with professional bodies, businesses, and academia for capacity building of independent directors to improve corporate governance, Chairman Tuhin Kanta Pandey said on Monday.
Speaking at the CII Corporate Governance Summit, Pandey highlighted gaps in effective governance.
“What we are increasingly observing is a gap — not in intent, not in regulation — but in translation. Boards are well constituted, but not always equally effective. Information is available, but not always interrogated deeply. Independence exists in form, but may not always translate into (an) independent perspective,” the Sebi chairman said.
He further urged independent directors to bear responsibility, and support and find solutions through accountability. They should not focus only on compliance and ‘pointing fingers at the management’, he added.
“The conversation must now move beyond who sits on the board to how effectively they are able to contribute once they are there,” Pandey said.
His comments come at a time when corporate governance at HDFC Bank has come under scrutiny following the sudden exit of its previous chairperson Atanu Chakraborty citing ‘ethics and value’ mismatch.
The Sebi chairman also called for broader shifts by independent directors from information to insight. This should not only involve reviewing data but also interpreting what it implies, encouraging constructive dissent, and moving from compliance-driven discussions to value-driven conversations engaging on conduct and long-term sustainability along with financial performance.
He also urged them to leverage technology to bring relevant signals to the board in a timely manner.
While alluding to the improvements in disclosures, board structures, and accountability mechanisms, Pandey said that Sebi has strengthened periodic and event-based disclosures to reduce information asymmetry, introduced clearer materiality thresholds and timelines, as well as enhanced board independence and committee oversight.
“These measures have helped create a strong foundation. But a strong foundation does not automatically ensure effective outcomes,” said the Sebi chairman.
