SEBI Chief Urges Shift From Compliance to Stewardship for Corporate Boards

Indian boardrooms must evolve from basic regulatory compliance to proactive stewardship as corporate risks multiply, Securities and Exchange Board of India Chairman Tuhin Kanta Pandey stated at the Institute of Directors Annual Directors Conclave. Speaking to board members and key executive personnel, Pandey emphasized that trust remains a company's most vital asset, making active governance far more important than mere formal adherence to disclosure norms.

The SEBI chief highlighted that independent directors need to look well beyond reviewing financial statements and approving routine proposals. With enterprises facing rapid disruptions from artificial intelligence, cyber risks, climate change, and volatile geopolitics, independent directors are expected to challenge management constructively and bring independent perspectives to critical board decisions.

This stewardship mandate extends beyond corporate boardrooms to institutional investors across India's financial ecosystem. Pandey pointed out that mutual funds and alternative investment funds are bound by SEBI's Stewardship Code to actively engage investee companies on governance, strategy, and environmental and social risks, reinforcing sustainable value creation over short-term financial targets.

While India's Listing Obligations and Disclosure Requirements framework provides a robust structure for board oversight and related-party disclosures, Pandey stressed that real governance depends on boardroom culture. Moving from passive oversight to active stewardship ensures companies protect stakeholder interests when confronted with unprecedented market complexities.