Pillars and Challenges of Corporate Governance in India
Economy · Tuesday, 1 September 2026
Good corporate governance is central to national development, balancing interests of shareholders, management, and the community. The Institute of Company Secretaries of India (ICSI) evaluates standards through its annual National Awards for Excellence.
Quick highlights
- Transparency and machine-readable financial disclosures under SEBI (LODR) regulations.
- Independent board oversight through Audit and Nomination & Remuneration committees.
- Section 245 of the Companies Act provides for class-action litigation to protect minority shareholders.
- Secretarial Audits ensure adherence to statutory laws and Secretarial Standards (SS-1 and SS-2).
- Mandatory ESG reporting through the Business Responsibility and Sustainability Report (BRSR).
Context
A delegation from ICSI interacted with the Union Minister of State for Personnel, highlighting the role of qualified Company Secretaries (over 80,000 members) in guiding boardrooms toward ethical compliance.
Challenges
Promoter dominance in family-owned firms often weakens board independence. Abuse of Related-Party Transactions (RPTs) and 'check-the-box' compliance remain persistent hurdles in both startups and listed entities.
Way Forward
The expansion of governance frameworks to local bodies (Panchayats/Municipalities) and the mandatory secretarial audit for large unlisted public companies can improve grassroots administrative standards.
Remember this
- ICSI: Institute of Company Secretaries of India.
- BRSR: Business Responsibility and Sustainability Report.
- Section 245: Class-action suits under Companies Act, 2013.
- Company Secretaries conduct non-financial audits.