Governance Evolution: Board Diversity, Tech & Future of CS Role

Governance Evolution: Board Diversity, Tech & Future of CS Role

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Boards are actually beginning to use digital tools, data analytics, even AI to access better information and support more informed decision making. To always stay anchored to the principle of doing the right thing.

Hello everyone, this is Deepak from Dess Digital. Glad to welcome you to another important conversation. Lots of new updates happening in corporate governance and around the world. Here at Dess, we support CXOs and governance professionals to help improve board activities — be it board meetings, evaluations, compliances and other governance areas. For this episode, we are honored to welcome Ms. Vatsala Sameer as our guest today. Ms. Vatsala recently completed 15 years with Canara HSBC Life Insurance and is presently the Senior Vice President Legal and Company Secretary. Her past experience also includes Max Life Insurance, BILT and Escorts Group. In addition to being a qualified company secretary, Ms. Vatsala also holds an LLB degree from Chaudhary Charan Singh University and a BA Economics degree from Delhi University. With over two decades of vast experience, Ms. Vatsala brings immense expertise in the area of board management, secretarial compliances, litigation, corporate governance and regulatory matters. Our MD Mr. Ganeriwal and our team are very grateful to Ms. Vatsala for her early encouragement of our technology. We are delighted to have her join us today to share her valuable insights. Welcome Ms. Vatsala. How are you doing today? Many congratulations on your 15 year anniversary.

Thank you so much Deepak, that's really sweet of you to wish me. Yes, it has been a great milestone. I have been with this company for 15 years now, all through doing corporate governance, and recently about five to six years back I was given legal also. Thank you so much for that introduction and thank you for having me here to talk about one of my most favorite subjects which is corporate governance. Thank you for the opportunity.

Welcome ma'am. Pleasure is all mine. To start with, I would like to ask you — over the years we have seen increasing focus on diversity and participation in boardrooms. From your experience, how do you see the role of women evolving at the board level today?

I think you're right — diversity is increasingly becoming a focus area and an area of emphasis for all boards. Over the years the conversation around diversity has changed from just being a regulatory compliance to being the need of the hour. In the initial years, in many markets including India, the focus was driven largely by regulatory requirements to ensure compliance and representation. Let me talk about diversity in a broader sense of the word. Increasingly, organizations are now recognizing that diversity — not only gender diversity but also in terms of experience and professional background — actually strengthens board deliberations. Having varied perspectives on the board table often leads to richer discussions and a more balanced decision making process. Today boards are dealing with very complex issues ranging from cybersecurity to internal financial controls to sustainability, so it becomes all the more important to have a diverse set of views during a board meeting. Encouragingly, we are also seeing that women directors are now contributing meaningfully across areas — not only compliance but strategy, committee leadership and sustainability. Overall, corporate India is now serious about diversity at the board level and so are regulators. Corporate governance guidelines laid down by most regulators in various sectors in India include an ask — not a mandate but definitely an ask — of having a diverse board in terms of years of experience, background and even gender diversity. We are slowly and surely moving towards it.

That's very insightful ma'am. Considering your extensive experience of more than two decades in the profession and over 15 years with Canara HSBC, you must have witnessed significant changes in governance practices. Could you highlight some of the key paradigm shifts you have observed in how boards function today compared to around 10 to 15 years ago?

Yes, I have seen that. If I look back 10 to 15 years, boards were often perceived as oversight bodies that just had to make sure the company was doing its compliances — just focus on compliance and statutory responsibilities. Today the focus of the board is so much more. Those two responsibilities definitely remain critical — compliance and statutory responsibilities — but what has now increased is that the board is far more engaged in strategic discussions and long-term value creation, with increasing levels of accountability on directors, stronger regulatory expectations and stakeholder scrutiny. If you're listed, you are under the scrutiny of so many stakeholders including society. The role of a director today carries more responsibility. Directors cannot — and need not — be involved in all operational details. There is a much stronger emphasis on robust governance frameworks. What a director wants while being part of a board is to ensure that there are proper risk management systems, proper internal controls, processes, reporting mechanisms and a healthy control environment so that as a director they are able to fulfill their duties and responsibilities towards the company. We are also seeing a lot of structure being brought into board processes — be it evaluation, be it deeper engagement with management. Earlier it used to be once a quarter, two hours maximum, but now there is constant engagement with management on emerging areas like technology risks and stakeholder governance. Even between two board meetings, a company secretary's life and a director's life is constantly engaged — it is really not a once-a-quarter job anymore. Overall, the role of the board has primarily changed from monitoring compliance to providing strategic guidance while ensuring strong governance and risk oversight on processes.

This answer was so beautiful — it was truly reflecting your 10 to 15 years of experience. So ma'am, talking about board functions and considering that the board of directors is the ultimate body responsible for the management of a company, are there any checks or evaluation mechanisms in place to assess the working and performance of directors within the company?

Yes. While there is a mandate under the Companies Act, I feel it is a very important aspect of board governance. While the board is the ultimate decision-making body, there are structured mechanisms in place today to assess its effectiveness and the performance of individual directors. One of the key mechanisms is the formal board evaluation process under the Companies Act 2013, which calls for periodic review of the performance of the board, its committees, individual directors and even the chairman. This typically looks at aspects such as participation in meetings, how prepared they are when they come, whether they have gone through the agenda, the quality of contribution to discussions and the ability to provide oversight and strategic guidance. Another layer comes through the committee structure — the Companies Act and various sector-specific regulations mandate many committees because the scope has increased so much that the board needs to do effective delegation. For listed companies and insurance companies in particular, the risk management committee and investment committee are so important because we are after all handling money of policyholders and this needs to be done in the right and ethical manner. Many organizations also periodically engage external experts and facilitators to conduct board evaluations with tools that maintain anonymity. Overall I think these mechanisms ensure that the evaluation process remains effective, accountable and continuously improving. With the maturity of corporate India's understanding of this evaluation process over the past 10 to 12 years since the requirement came in, this process is now taken up very seriously. That's a very good development.

Constant improvement is required for everyone.

In fact, our board has also advised us to take it to the next level of maturity, so we are all thinking about it now.

It's very exciting to know such a great initiative from the board — that we should always evolve. So ma'am, if you had to look at the direction in which governance practices are evolving today, what do you think could be the next big change in the secretarial space over the next five years?

Let me broaden that a bit — not just secretarial but overall corporate governance. I think there are three areas which are going to shape the next phase of corporate governance. First, there will be an even greater focus on sustainability and broader stakeholder expectations. By sustainability I do not limit it to environment alone — I mean the entire ESG. Boards today are increasingly expected to look beyond financial performance and compliance, and consider environmental, social and long-term impact factors in their decision making. Second, technology will play a much larger role in governance going forward. Boards are actually beginning to use digital tools, data analytics and even AI to access better information and support more informed decision making. At the same time there is a growing need for boards to strengthen their oversight on technology-related risks like cybersecurity and data governance, and with new laws coming in this emphasis will only increase. Finally, the third factor is the growing recognition that board effectiveness is not only about formal structures but also about boardroom culture — which includes ensuring open dialogue, constructive challenging and the right mix of skills and perspectives across the board table. Overall, governance is clearly moving towards a model that combines strong oversight, informed decision making and a broader stakeholder perspective.

Absolutely. If you had to give one piece of advice to younger company secretaries who are beginning their journey in corporate governance, what would it be?

It's been 25 years now since I cleared my exams, but I would love to talk to company secretaries coming into this profession. The most important advice I'd like to give is to always stay anchored to the principle of doing the right thing. You can never go wrong about doing what is right. In a governance role there can be situations where the right path is not the easiest one, but always remember — you are never wrong about doing what is right. That's a mantra everybody should remember. The second aspect I would emphasize is — please do not restrict yourselves to just ticking compliances. Always remember you are an advisor too. You are someone to whom the board will turn for advice on governance and you might not always find those answers on paper. Develop your skills on governance, really understand what governance is all about and give the right advice to the board. One more thing — the age of cut, copy, paste has really gone. Something that worked last year need not necessarily work this year. So if you're doing the same work or assignment next year, make sure you have upskilled yourself. Every time you take up a task, open the books again because things change. The regulatory and legal environment is changing at such a fast pace that if you don't keep up with it, you will lose perspective. Every day is a new day in the life of a company secretary because regulations are changing — and they're changing because the environment is changing. Upskilling is very important.

That was a very good piece of advice. We are living in an ever-changing legal and environmental world — every day new norms, new regulations, new updates come. We have to keep ourselves updated so that we can advise not only our boards but other corporate professionals to keep the corporate sector of India very intact and very advanced.

That's our responsibility.

Absolutely ma'am. Thank you so much for sharing your valuable insights with us today. It was truly a pleasure having this conversation with you. Your inputs around board management, evaluation and secretarial practices will truly guide the corporate governance community. Our goal at Dess is to make the best use of technology to make corporate governance easier for boards and professionals. Thank you for being part of this discussion and contributing meaningfully. Thank you to everyone who joined us today — feel free to connect with us as we continue our mission to make corporate governance technology easier.