Most India Inc boards remain passive on strategy

Only 17% of corporate boards in India play an active role in shaping company strategy, with the overwhelming majority remaining largely passive despite strong compliance practices, according to a new corporate governance survey of directors from the country’s largest listed firms, released on Monday.

The findings are part of the Corporate Governance Report 2025 – The Board’s Looking Glass by the Indian School of Business (ISB), based on a survey of over 200 directors from BSE 500 companies.

The study assesses governance maturity across guidance and oversight, board functioning, and leadership, and evaluates the effectiveness of key committees such as audit, risk management, and nomination and remuneration.


While 98% of directors view their boards as compliant, the report finds a sharp disconnect between regulatory adherence and strategic engagement. Most boards (83%) play a passive role in strategy, and 36% of directors admit their boards provide limited or no input beyond reviewing management’s plans.

“Although 98% of directors see the Boards as being compliant, which is commendable progress compared to yesteryears, there is a widening gap between guidance and oversight on the one hand, and strategic influence on the other,” said Sanjay Kallapur, professor of accounting at ISB and a co-author of the report.

“Effective oversight requires directors to go beyond compliance, anticipate risks, and guide management with foresight and conviction. As India’s corporate sector expands globally, boards must evolve from passive monitors to active stewards of long-term value creation," he added in a statement.

The report points to behavioural gaps that limit boards’ strategic effectiveness. One such issue is information dependence: only 27% of directors seek inputs from independent sources, a pattern the report says risks creating an “echo chamber” and reinforcing groupthink.

Nirmalya Kumar, visiting professor of strategy at ISB and a co-author of the report, said, “Indian boards are diligent in process and participation, but many fall short in translating these into meaningful strategic dialogue. Effective board functioning requires more than attendance and agenda compliance; it demands independent thinking, constructive challenge, and engagement beyond formal meetings,” he said. “True governance maturity lies in fostering boardrooms that value preparation, perspective, and the courage to ask difficult questions.”

The survey also flags a lack of openness between boards and management. Satisfaction with candour stands at just 38%, indicating a reluctance among directors to give CEOs unfavourable feedback. Further, 22% of boards remain disengaged from whistleblower and vigilance mechanisms, treating them largely as compliance requirements rather than tools to build trust and transparency.

Committee effectiveness presents another area of concern. While audit committees perform strongly on financial oversight, their involvement in whistleblower and behavioural issues remains limited.

Nomination and remuneration committees, meanwhile, show weaknesses in CEO succession planning, with fewer than half of boards maintaining a clearly identified pool of successors.

The report also raises questions about the director's preparedness and independence. Harish Raichandani, adjunct faculty at ISB and co-author of the report, 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 pointed to findings showing that at least one in three directors does not adequately prepare for meetings, two in five directors show weak alignment with the company’s mission, and only one in six directors brings a genuinely independent external perspective to boardroom deliberations.