The directors on the boards of Indian corporates demonstrate ‘strongboard’ effectiveness, marked by a culture of collaboration, effective Board-CEO engagement, and commitment to their roles, according to a study by the Indian School of Business (ISB)

According to the India Corporate Governance Scorecard – 2024 released by ISB Executive Education the directors exhibit a dichotomy in risk oversight, with high confidence in regulatory compliance at 95 per cent yet mixed vigilance over obsolescence and technology risks at 68 per cent and 72 per cent respectively.

“Strategic oversight emerges as a critical area for improvement, with only 68 per cent satisfaction, indicating a potential blind spot in Indian boardrooms’ competencies,’” ISB said in a release on findings of the study.

Scorecard study

The India Corporate Governance Scorecard study was conducted by Sanjay Kallapur, Professor, ISB, Nirmalya Kumar, Professor, SMU, and Harish Raichandani (adjunct faculty), ISB. The empirical report was based on a survey of directors from Indian Companies, and offers insights into the prevailing practices and challenges in corporate governance.

The study evaluated corporate governance in nine areas across three dimensions: Guidance and Oversight, Board Functioning, and Leadership. The responding directors provided perspectives on boards of different types of companies, such as, professionally managed companies, promoter/ family-owned, multinational corporations, Indian conglomerates, and the PSUs.

“Corporate governance is a driver of value creation and competitive advantage for companies. The report aims to serve as a catalyst for constructive dialogue and action among various stakeholders, such as regulators, investors, board members, executives, and academics, to foster a culture of excellence and innovation in corporate governance in India,’’ Emphasising the goal of the Scorecard released, Sanjay Kallapur, Professor, Accounting at ISB said.

Published on February 9, 2024