Boards Shift Focus from Compliance to Strategic Growth and Innovation
NEW DELHI — Corporate boards are undergoing a significant transformation, moving away from their traditional roles in governance to becoming pivotal in driving growth, innovation, and strategic decision-making. A survey by global search firm Executive Access, commissioned by The Times of India, reveals that boards are now more than just compliance checkers; they are engines of corporate advancement.
Historically, five years ago, boards were primarily focused on ensuring compliance. However, today's business landscape demands a proactive approach, with boards engaging in deep, strategic dialogues and fostering innovative thinking. This evolution reflects a broader shift towards meritocracy in selecting board members, with an emphasis on those who possess the intellectual and professional breadth necessary for today's volatile business environment.
Ronesh Puri, Managing Director of Executive Access (India), commented, “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.”
The survey, which included insights from 120 board members, also highlighted that modern boards are attracting talent by embodying strong values and promoting open discussions. Harsh Goenka, Chairman of RPG Enterprises, noted, “In the past, corporate boards were often a mere legal formality. Today, they’ve transformed into a powerful strategic necessity, pivotal in defining a company’s trajectory.”
The role of boards has expanded to include not just oversight but active participation in strategic planning, leveraging networks, and ensuring robust succession planning. This shift is particularly crucial in what has been termed the BANI (Brittle, Anxious, Nonlinear, and Incomprehensible) world, where the advent of AI and other technologies increases both risks and opportunities for innovation.
Nikhil Ojha, Partner at Bain & Co and head of the strategy practice for Asia Pacific, emphasized, “Many board members now recognize their fiduciary responsibility not just in terms of defensive 'do no harm' but also as stewards of shareholder value creation agenda.”
Moreover, the survey pointed out that with the funding winter and increased investor scrutiny on profitability, there is a notable pivot towards valuing the bottom line over mere top-line growth. This comes in the wake of lessons learned from companies like Byju’s and Paytm, which faced challenges due to an overemphasis on revenue growth at the expense of profitability.
Siraj Chaudhry, who serves on the boards of Jubilant Ingrevia and Carrier Air Conditioning, and Daljit Singh, former President of Fortis Healthcare, both underscored the need for boards to ensure alignment among key management personnel, with the Audit and Risk Management Committee playing an increasingly critical role in this dynamic environment.
This transformation in the role of corporate boards aligns with broader changes within India Inc., signaling a new era where boards are not just guardians but active participants in steering companies towards sustainable success.