At the 2025 Annual Directors’ Conclave, SEBI Chairman Tuhin Kanta Pandey made a compelling appeal to Indian boardrooms, asking independent directors to move beyond ceremonial roles and step into a more responsible, courageous space as active stewards of accountability. He urged companies to rethink how they define boardroom leadership, especially in a world that is changing faster than governance models can keep up with.
Pandey opened his address by highlighting a key concern. While many directors today hold impressive credentials, there is a gap in how they understand and engage with fast-evolving risks. From artificial intelligence and cybersecurity to environmental disclosures and stakeholder activism, the new threats demand sharper insight and a readiness to question, dissent, and guide.
He warned against treating governance like a checklist to be ticked off for compliance. Instead, he said it should be viewed as a living value, one that demands attention to succession planning, executive compensation, whistle-blower activity, and most importantly, company culture. Culture, according to Pandey, must be as much a board-level responsibility as financials or strategy.
Pandey used the metaphor of a company as a ship moving at full speed through unpredictable waters. The CEO may be at the wheel, but the board must be the one watching the compass, monitoring for ethical blind spots, regulatory risks, and reputational hazards. Governance, he said, is not just about moving fast. It is about moving in the right direction. The board should not be a group of passive passengers but rather an active team of navigators with different tools and viewpoints, working together to ensure the journey remains responsible and ethical.
He acknowledged that India has made significant strides in corporate governance over the last two decades. Regulations around board composition, audit and risk committees, and independent directorship are now firmly in place. But structure alone is not enough. The real test lies in how actively and thoughtfully these responsibilities are carried out.
Boards often spend excessive time reviewing compliance checklists, while signs of deeper issues such as cultural erosion or leadership gaps are ignored. Pandey asked a piercing question to the audience: Independent directors sit at the table, but are they truly being heard? While there may be diversity on paper, is there diversity in thought and courage?
The changing corporate landscape adds urgency to his message. Start-ups with no profit track record are being listed at high valuations. Artificial intelligence is now making business decisions that affect real lives. Reputational damage can go viral in a matter of minutes. Despite these shifts, most boards have not evolved fast enough. Pandey emphasized the need for selecting directors from beyond familiar social or professional networks to bring in fresh perspectives and challenge conformity.
He strongly advocated the use of digital governance tools to track internal signals that can warn of future risks. From employee exits and vendor concentration to ESG red flags and whistle-blower complaints, the technology is available to empower boards with real-time insights. Yet many boards remain hesitant, viewing digital tools as burdens rather than assets. That mindset, he argued, must change.
True board strength, according to Pandey, comes not from silence or politeness but from constructive friction. Regulators can create frameworks and structures, but they cannot mandate courage. That courage must come from the people who lead companies in times of pressure, uncertainty, and change.
In closing, Pandey reminded the audience that governance is not just a structural concept. It is human. When policies fail or unexpected crises hit, what matters is not what the rulebook says but how prepared your people are. The future of Indian businesses depends on the character and clarity of those leading them. And boards must now rise to that responsibility with greater honesty, agility, and foresight.
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