SEBI Chief: Boardroom Engagement, Not Rules, Key to Next Governance Phase

Addressing the 19th Corporate Governance Summit organised by CII, Pandey said that while India has built a robust governance framework over the years, the next phase of evolution must focus on improving the quality of decision-making and participation within boardrooms.

"The effectiveness of governance will not be merely determined by how comprehensive our regulations are, or how detailed our disclosures become," Pandey said, underlining a shift away from rule-based assessment of governance.

He stressed that governance outcomes will instead be shaped by "the quality of questions asked in boardrooms, the depth of understanding behind those questions, and the confidence to act on them."

Highlighting gaps in current practices, the SEBI Chairman noted that while boards are well-structured and information is increasingly available, the depth of engagement often remains uneven. He pointed out that independence in board composition does not always translate into independent thinking or effective oversight.

Pandey called for a stronger focus on capacity building of independent directors, describing it as the "next frontier" in governance reforms. He said modern boardrooms must grapple with complex issues such as technology, cyber risks, and evolving regulatory landscapes, making continuous learning essential.

He also proposed measures such as domain-specific orientation, peer learning platforms, and knowledge-sharing networks to enhance board effectiveness.

"Let us therefore invest not just in strengthening rules, but in strengthening the people who give life to those rules," he added.

Pandey further indicated that SEBI would work towards collaborative initiatives with industry bodies and institutions to scale up capacity-building efforts for independent directors.

The market regulator's remarks come at a time of increasing global economic uncertainty and rising expectations from investors, placing corporate governance at the centre of market confidence and institutional resilience.

- ANI