Board-level rift good for corporate governance in India
In Short
Explore how tighter governance, active institutional investors, and rising boardroom friction at giants like Tata and Coforge are transforming corporate dynamics in India.
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Board-level rift good for corporate governance in India
Corporate rift at India’s one of the oldest corporate houses, Tata Group is making daily headlines. Friction between Tata Trusts (the majority owner of Tata Group) and Tata Sons has amplified with the reappointment of N Chandrasekaran as the Chairman of Tata Sons. An impending legal tussle seems to be the outcome going forward. Similarly, another corporate development hugged the headline recently.
OP Bhatt, who was the former chairman of SBI, resigned from his chairmanship at mid-tier IT services company, Coforge. After his resignation, DK Singh- an independent director of Coforge- also resigned. And there were claims and counterclaims from both company and resigned director’s side on the reason of these exits. While lapses in corporate governance cited as the reason for Chairman and director’s exit by the company, Singh had alleged that there were tensions between independent and executive directors.
Reports also emerged suggesting that friction brewed in the board after private equity fund, Advent got board representation after Coforge’s acquisition of Encora. Similar differences had earlier emerged at country’s one of the largest lenders, HDFC Bank. Similarly, differences between the management and the chairman had led to abrupt resignation of Atanu Chakraborty as the chairman of HDFC Bank in March 2026. Subsequently, the private lender said last month that its present CEO, Sashidhar Jagdishan wouldn’t seek extension and will retire on October 26, 2026.
There were several such instances of board rift reported in Indian companies including startups in last decade. These instances indicate that Indian boards are maturing. Earlier, there was a perception that management or promoter of a company picked up couple of ‘yes men/women’ as board members so that they would not face any uncomfortable questions on management activities.
Gone are those days as regulations with respect to corporate governance has been tightened over the last two decades. Several checks and balances have been introduced by the market regulator, SEBI and the Ministry of Corporate Affairs over the years. Similarly, the role of independent directors has been strengthened over the years. These moves have made board members more proactive in their roles, where they are viewing their dissidents freely.
Many of the times, these differences of opinion are leading to board-level friction. Another factor is also driving board-level differences. With India emerging as the third largest ecosystem, fund flows from private equity and overseas institutional investors have gone up multiple times. These overseas entities, especially the PE fund houses, are looking at all board deliberations and management decisions very closely to protect their investments in the company.
This is leading to many instances where the board members and the management are not at same page with regard to direction of the company or growth approach. Even board members, some time, are not in agreement on multiple things. In some instances, these issues lead to personality clashes. Now, it is to be seen whether these developments are good for India Inc or detrimental to its health. Frankly, there are no clear answers. In some instances, corporate governance standards improve due to such rifts and in other, no visible benefit emerges.
But one thing is clearly standing out now that board members, management and even chairmen of companies are now speaking out. That’s a good sign. Because the boards of companies can’t comprise bunch of people who are just nodding heads to management’s every decision. Need of dissonance can’t be overstated in India Inc where several businesses are family-owned with promoter dictating terms across the spectrum.
