Companies flouting ID requirement rise in FY25: Excellence Enablers survey

Excellence Enablers survey finds 16 Nifty 100 companies flouting independent director rules in FY25, with PSUs and PSBs dominating non-compliance cases

The number of companies failing to meet the minimum requirement of independent directors on their boards increased to 16 during 2024-2025 (FY25) from 11 in FY24, according to a corporate governance survey conducted by Excellence Enablers.

At the end of FY25, 16 companies among the Nifty 100 firms were non-compliant, including 11 public sector units (PSUs) and three public sector banks (PSBs).

 

Notably, five PSUs had not even a single independent director on their boards. In comparison, FY24 saw 11 non-compliant companies, comprising eight PSUs and two PSBs. 

As of March 31, 2025, eight companies did not have any woman independent directors, while 39 companies featured two or more women independent directors. 

The Companies Act, 2013 mandates that at least one-third of the total number of directors on a listed company's board should be independent directors.

 

Further, Securities and Exchange Board of India (Sebi) regulations stipulate that if a listed company lacks a regular non-executive chairperson, at least half of the board must be independent directors. 

The 6th edition of the survey also emphasised the importance of separating the roles of the board chairperson and managing director or chief executive officer (MD/CEO). 

 

However, 37 companies continued to combine these roles. The report criticises this, stating, “It is unfortunate that this separation has been made non-mandatory,” and warns that combining these roles contradicts a fundamental principle of good corporate governance.

 

On a positive note, the survey recorded improvements in director attendance and the number of board meetings held annually, with the majority of companies exceeding the minimum requirement of four meetings.

The survey also identified persistent risks over the past four financial years.

 

They include lack of succession planning, absence of business continuity plans, inadequate human resource and talent management, geopolitical risks, human rights concerns, diversity and inclusion challenges, business ethics and integrity issues, fraud and intellectual property rights (IPR), among others. 

Cybersecurity incidents remain an area of concern. In FY24, 14 companies reported data breaches or related incidents, though only five disclosed details. In FY25, eight companies reported such incidents, with seven providing details of the breaches.