4 min readAug 8, 2026 07:47 AM IST
First published on: Aug 8, 2026 at 07:01 AM IST
By Shailesh Haribhakti and Ajay Goel
The king shall consider as good, not what pleases himself, but what pleases his subjects.” — Kautilya’s Arthashastra. Corporate governance has produced an entire architecture of codes, committees, and compliance calendars — the G20/OECD Principles, the UK Corporate Governance Code, Sarbanes-Oxley, India’s Companies Act and SEBI’s LODR. All of it matters. None of it is sufficient. Rules constrain bad behaviour; they do not manufacture good judgment. That must come from the boardroom itself.
The board is not one input into governance among many. It is the governance system. Everything else — disclosure norms, audit standards, committee charters — exists to give the board the information and independence to do one job well: Decide, in real time, before the damage is done.
Most boards still don’t do this. They review. They ratify. They arrive at a meeting with a thick deck, ask a few sharpened questions, and approve what management has already decided. That is oversight in name, not substance. The shift that matters — the one every code gestures at but few boards execute — is from reviewer to steward: From approving what happened to shaping what happens next.
What does that shift look like in practice?
First, boards must engage strategy and risk before it hardens into a recommendation, not after. Issue papers, competitive benchmarking, and explicit scenario trade-offs — brought to the board while options are still open- do more for governance quality than any additional disclosure requirement. A board that only sees the final recommendation has already lost its independence, regardless of how independent its directors are on paper.
Second, information architecture has to change. Boards drown in volume and starve insight. The fix is not more pages; it is fewer, sharper ones — a risk heat map instead of a risk register, a handful of leading indicators instead of a hundred lagging ones. An independent director’s real power is exercised in 15 minutes before a decision is made, and that power is only as good as the material put in front of them.
Third, related-party transactions and promoter-influenced decisions deserve a strategic lens, not just a compliance one. Arm’s length pricing and threshold approvals are the floor, not the test. The real question a board should ask is whether a transaction would survive scrutiny from a minority shareholder reading about it for the first time. In promoter-led and family conglomerates — the dominant model across Asia — this is where board credibility is built or lost.
Fourth, dissent must be engineered in, not hoped for. An independent chair who separates the roles of conductor and executive; independent directors who are genuinely expected to challenge, not just attend; structured, management-free conversations with auditors, rating agencies, and proxy advisors — these are not courtesies; they are the mechanism by which a board avoids becoming an echo chamber. Boards fail less often from a shortage of expertise than from a surplus of deference.
Fifth, composition has to be treated as a live decision, not a legacy one. A skills matrix filed away rather than actively used to plan succession is theatre. Long, comfortable tenures without renewal are a governance risk, whatever the individual director’s competence.
None of this is exotic. It does not require a new code or a new regulator. It requires boards to spend their scarce time differently — less time ratifying, more time interrogating; less time on the deck in front of them, more time on the decision three moves ahead.
The companies judged well a decade from now will not be the ones with the most elaborate governance manuals. They will be the ones whose boards behaved like stewards when it counted, asking the uncomfortable question in the room where the decision was still reversible, rather than in the post-mortem where it was not.
That is the single point worth taking from the entire governance debate: Fix the boardroom, and the rest of the system follows. Fix everything else and leave the boardroom untouched, and none of it will be enough.
Haribhakti is Chairman of Shailesh Haribhakti & Associates and Non-Executive Chairman of Blue Star Limited. Goel is Group CFO of Vedanta
The companies judged well a decade from now will not be the ones with the most elaborate governance manuals. 
Share
