Boards Evolve from Compliance to Growth Drivers, Survey Reveals
NEW DELHI – A recent survey by global search firm Executive Access, commissioned by The Times of India, highlights a significant transformation in the role of corporate boards in India. Moving beyond their traditional focus on compliance, boards are now seen as pivotal in driving innovation, strategic decision-making, and overall corporate growth.
The survey, which polled 120 board members, underscores a shift from a compliance-oriented approach to one that encourages proactive engagement and innovative thinking. "The survey indicates that boards today are more evolved and have moved beyond corporate governance. A well-structured, business-savvy board can significantly drive growth," said Ronesh Puri, Managing Director of Executive Access (India).
This evolution is reflected in the selection process of board members, with a stronger emphasis on meritocracy. Boards are now seeking individuals with both the intellectual acumen and professional breadth to navigate today's volatile business environment.
Harsh Goenka, Chairman of RPG Enterprises, noted the transformation, stating, "In the past, corporate boards were often a mere legal formality, convened to tick the compliance box. Today, they’ve transformed into a powerful strategic necessity, pivotal in defining a company’s trajectory."
The survey also highlights that modern boards are not just approving decisions but are actively involved in providing strategic guidance, leveraging their networks, and ensuring technology integration and robust succession planning. "Leadership teams are no longer just seeking approval; they’re actively seeking guidance and insights from the board," Goenka added.
In the context of the BANI (Brittle, Anxious, Nonlinear, and Incomprehensible) world, the role of boards has become even more critical. Nikhil Ojha, Partner at Bain & Co and head of the strategy practice for Asia Pacific, emphasized that board members now see their role as stewards of shareholder value, pushing for both defensive strategies and proactive growth initiatives.
The survey also pointed out a shift in priorities due to economic conditions like the funding winter. Board members are now focusing more on profitability over mere topline growth, a lesson learned from companies like Byju’s and Paytm, which faced challenges due to their previous focus on aggressive expansion.
Siraj Chaudhry, who serves on several boards, observed that this transformation aligns with broader changes across India Inc., where boards are expected to ensure alignment among key management personnel. Daljit Singh, former President of Fortis Healthcare, highlighted the increasing importance of the Audit and Risk Management Committee in this new dynamic.
This evolution signifies a broader recognition of the board's role in not only safeguarding the company but also in steering it towards sustainable growth and innovation.