Hyderabad, Jan 5 (.) : A new study by the Indian School of Business (ISB) on Moday revealed that most Indian corporate boards remain passive in shaping company strategy, raising questions about the future readiness of governance in the country. The ISB Corporate Governance Report 2025 – The Board’s Looking Glass, authored by Sanjay Kallapur, Nirmalya Kumar, and Harish Raichandani, is based on a survey of over 200 directors from BSE 500 companies.
It assessed governance maturity across guidance and oversight, board functioning, and leadership, and evaluates the effectiveness of audit, risk management, and nomination and remuneration committees.
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 findings show that only 17 per cent of boards actively contribute to strategy, while 83 percent take a more reactive, compliance-focused role.
More than one in three directors acknowledged that their boards provide limited or no input beyond reviewing management plans.
Professor Sanjay Kallapur, Professor of Accounting at ISB, noted that although 98 per cent of directors view boards as compliant, there is a widening gap between oversight and strategic influence, and boards must evolve from passive monitors to active stewards of long-term value creation.
The report highlightes several behavioural and structural gaps, including limited independent perspective, with only 27 per cent of directors seeking information from external sources; low candour in board-CEO interactions, with satisfaction at just 38 per cent; and committee weaknesses, particularly in CEO succession planning and engagement with whistleblower or behavioural issues.
Around one-third of directors do not prepare adequately for meetings, and only one-sixth consistently bring an independent external perspective to discussions.
Nirmalya Kumar, ISB’s Visiting Professor of Strategy, emphasized that effective governance requires independent thinking, constructive challenge, and engagement beyond formal meetings.
Harish Raichandani, Adjunct Faculty and Researcher, ISB, said, “Independent Directors on the Indian corporate boards need to improve their ‘work ethic’, appetite to keep abreast, and find courage to speak up.”
He cited the study findings that at least one in three directors do not adequately prepare for their meetings, two in five directors’ alignment with the Company’s mission appears weak, and only one in six directors truly brings forth an independent external perspective to the deliberations taking place in the boardroom.”
The study concludes that while Indian corporate boards are structurally sound and committed to stewardship, addressing deeper behavioural and strategic gaps is critical for future-ready governance, with true maturity defined by foresight, candour, and the courage to challenge assumptions.
. KNR PRP