India’s Boardroom Crisis: Why Independent Directors Are Missing Despite a Surplus of Talent

How is it possible that 792 people in India hold 1,328 independent directorships, yet at the same time, over 118 board seats in top companies are lying vacant?

Sounds bizarre, right? But that’s exactly the reality of India Inc’s boardrooms today. On one side, we have a small set of familiar names being recycled across multiple companies. On the other, a growing pool of highly qualified professionals — from consultants to lawyers to risk experts — are waiting on the sidelines, never getting that call.

It’s not that India lacks talent. The real problem is that companies stick to their own circles, old networks, and “people they know” when filling up these crucial roles. The result? A few individuals are overbooked, fresh voices are shut out, and corporate governance ends up looking more like a formality than a safeguard.

And here’s the kicker — this isn’t just a corporate HR problem. It’s a governance issue that directly impacts investor trust, minority shareholder protection, and the credibility of Indian companies on the global stage. When independent directors are supposed to be the watchdogs, but the same few are stretched thin across a dozen boards, how “independent” can their judgment really be?

The Problem: Talent Exists, Access Doesn’t

Here’s the irony: India has no shortage of skilled professionals who can serve as independent directors. Consultants, lawyers, ex-regulators, finance experts, risk managers — the talent pool is actually wider than ever before.

But guess what? Most of them never even get considered. Why? Because in the world of board appointments, it’s not about what you know, it’s about who you know.

According to data compiled by Prime Database Group, 61 Nifty 500 companies currently have 118 vacant board seats, while 225 vacancies exist across 143 NSE-listed companies. Yet, instead of tapping into this available pool of professionals, companies keep going back to the same familiar names.

Ketan Dalal, managing director at Katalyst Advisors, explained it perfectly — the selection of independent directors usually happens either through personal contacts or search firms, but the latter is used much less often. In simple terms, if you’re not already in someone’s “circle,” chances are you won’t even be considered, no matter how qualified you are.

This creates a strange imbalance: a tiny group of individuals serving on multiple boards, while hundreds of capable candidates remain invisible. And let’s be honest — when the same faces keep showing up everywhere, are we really getting “independence” of thought, or just recycled perspectives dressed up as oversight?

What’s Not Being Talked About

Most headlines stop at pointing out the vacancies and the “old-boys’ club” problem. But if you scratch a little deeper, there are bigger issues that nobody really talks about.

Let’s break them down:

1. The conflict of interest nobody wants to admit: When the same small pool of directors is sitting on multiple boards, can we really call them “independent”? Imagine one person serving on the boards of a bank, an insurance company, and a major infrastructure firm at the same time. How much fresh oversight can one brain provide across industries? The whole idea of independent directors is to bring unbiased judgment — but spreading a handful of people too thin risks turning independence into a rubber stamp.

   
   

2. Geography matters, but boards don’t see it: Another blind spot is regional imbalance. Most independent directors come from corporate circles in Mumbai and Delhi. Meanwhile, professionals from Bengaluru, Hyderabad, Pune, or even Tier-2 cities — where there’s a growing pool of digital, ESG, and risk talent — rarely get a look-in. This means boards often miss out on perspectives from India’s fastest-growing business hubs.

   
   

3. Women face a “double burden”: Yes, there are more women on boards today thanks to mandatory rules. But here’s the catch — many of these women are already senior executives juggling demanding full-time roles. That narrows the practical availability of women directors. And when women are brought in just to “tick the compliance box,” their skills in governance, risk management, or strategy often get overlooked. It’s like inviting someone to the party but not letting them dance.

The Bigger Governance Question

At the end of the day, independent directors aren’t just there to fill seats or make the boardroom look diverse on paper. They’re supposed to be the watchdogs of corporate governance — the ones who protect minority shareholders, question management when needed, and bring an unbiased perspective to the table.

But here’s the uncomfortable truth: if most appointments happen through friends of promoters or trusted circles, how independent are these directors really? If your seat at the table comes because of who you know, can you be expected to challenge the very people who put you there?

This isn’t just theory. Weak board independence has been at the heart of some of India’s biggest corporate governance scandals — from questionable related-party deals to delayed recognition of financial stress. Every time boards fail to act independently, it’s not just reputations at stake. It’s investor trust, market stability, and the long-term credibility of Indian companies.

And investors are watching closely. Global funds are paying far more attention to governance practices. A boardroom that looks like an echo chamber of old networks doesn’t exactly inspire confidence.

The Way Forward: From Box-Ticking to Real Change

So, what’s the fix? If the talent exists but access doesn’t, how do we break this cycle of recycling the same boardroom faces?

Here are a few ways India Inc could move from box-ticking to real governance:

1. Build a true digital marketplace for independent directors

   Think of LinkedIn, but just for board roles. SEBI already maintains a database of eligible directors, but it’s barely used. What if there was a transparent, well-promoted platform where companies could search for directors by skill set — ESG, risk, digital transformation, finance — instead of relying on “my friend knows someone”?

   
   

2. Use AI-based matching to cut through networks

   Companies are increasingly using AI for recruitment, so why not for boardrooms? Imagine an algorithm that matches a company’s governance needs with professionals who actually have that expertise. It’s merit-based, transparent, and levels the playing field for talent outside the usual circles.

   
   

3. Mandatory disclosure of how directors are chosen

   Here’s a simple governance tweak: make it compulsory for companies to disclose how an independent director was appointed — was it through a search firm, an open application, or a personal referral? Transparency would nudge boards to look beyond the same old names.

   
   

4. Treat board seats like C-suite hires

   Companies spend months hunting for a CEO or CFO, but independent directors are often picked in a matter of weeks. That needs to change. A structured search, rigorous interviews, and skill mapping should be the norm — because the stakes for governance are just as high.

   
   

5. Unlock untapped talent pools

   Boards should look beyond metro networks. India’s new corporate hubs — Bengaluru, Hyderabad, Pune, Chennai — are teeming with experts in tech, risk, and sustainability. Ignoring them means missing out on the very skills modern boards desperately need.

Comparison & Inspiration

If you think this “old-boys’ club” problem is uniquely Indian, think again. Globally, countries have faced similar issues — but some have found smarter ways to deal with them.

In the UK and US, for instance, the use of professional search firms and structured nomination committees is far more common. Many companies there treat the hunt for independent directors almost like a CEO search — with clear skill requirements, transparent processes, and, most importantly, a wider talent pool. This doesn’t mean their boards are perfect (far from it), but it does ensure that director appointments don’t rely only on personal phone books.

Now here’s an interesting analogy closer home: startups. Think about how startups form their advisory boards. They rarely care about who’s a “family friend” of the founder. Instead, they bring in advisors for very specific expertise — growth hacking, fundraising, compliance, or international expansion. In other words, startups pick people who can fill knowledge gaps, not just fill seats.

So why can’t listed companies, which have far greater responsibility to shareholders, adopt a similar approach? If scrappy young founders can hunt for the right advisors, surely multi-billion-dollar corporations can do the same for independent directors.

The Investor’s Angle: Why Governance is Money in Disguise

At the end of the day, corporate governance isn’t just about ticking SEBI’s compliance boxes — it’s about money, trust, and long-term value. And investors know it.

Both global and domestic investors are now paying sharper attention to board composition. For them, weak governance isn’t a minor HR flaw — it’s a red flag for potential risk. If a company can’t bring in truly independent directors, what does that say about its ability to handle conflicts of interest, crises, or even basic shareholder accountability?

That’s why proxy advisory firms like Institutional Investor Advisory Services (IiAS) are becoming more vocal. They routinely flag boards that recycle the same faces or fail to appoint qualified women directors. In some cases, they even recommend voting against resolutions where governance looks compromised. That’s not just bad press — it directly influences how institutional investors cast their votes.

And then there’s ESG investing. Environmental, Social, and Governance criteria have become non-negotiable for many global funds. A weak or tokenistic board doesn’t just risk shareholder criticism; it risks losing access to billions of dollars in ESG-focused capital. Put simply: if your governance looks shaky, your stock may never make it into the ESG portfolios of major international investors.

So here’s the harsh truth: companies that treat board seats like a “networking reward” are playing with fire. They may save face in the short run, but in the long run, investors will walk away from boards that can’t prove independence and credibility

Conclusion: Breaking the Boardroom Bubble

Here’s the truth: India doesn’t suffer from a shortage of independent directors. It suffers from a shortage of imagination in how they’re chosen.

Right now, the same 700-odd people are stretched across more than 1,300 board seats, while hundreds of highly qualified professionals remain unseen because they aren’t part of the “right circle.” That’s not just inefficient — it’s risky. It means companies are missing out on fresh skills in ESG, digital, and risk management, and shareholders are left with boards that often look more decorative than truly independent.

If India wants to build global trust, attract investors, and avoid the next big governance scandal, it needs to break this bubble. That means:

• using structured searches instead of speed-dial,

• embracing technology and transparency,

• tapping talent from beyond Mumbai and Delhi,

• and treating board seats with the same seriousness as C-suite hires.

Because at the end of the day, a boardroom isn’t just about filling chairs. It’s about building trust, accountability, and the courage to ask tough questions.

And that courage won’t come from the same recycled names. It will come from opening the doors to the talent India already has — but hasn’t yet chosen to see.

Our Directors’ Institute - World Council of Directors can help you accelerate your board journey by training you on your roles and responsibilities to be carried out efficiently, helping you make a significant contribution to the board and raise corporate governance standards within the organization.