SDG 8: Decent Work and Economic Growth | SDG 16: Peace, Justice and Strong Institutions | SDG 17: Partnerships for the Goals
Securities and Exchange Board of India (SEBI) | Institute of Company Secretaries of India (ICSI) | Ministry of Finance
On December 19, 2025, Shri Tuhin Kanta Pandey, Chairman of SEBI, addressed the 25th ICSI National Awards, highlighting that India’s capital markets are no longer a peripheral funding avenue but a central engine for capital formation. Market capitalization has reached over ₹470 trillion (134% of GDP), supported by 13.7 crore investors and a mutual fund industry holding ₹81 trillion in assets. This scale necessitates a shift in corporate governance from being a “procedural burden” to a “strategic asset” that builds long-term institutional credibility. A critical element of this transition is the adoption of Foresight Governance, where professionals recognize early red flags—such as recurring related-party transactions—before institutional trust is eroded.
Key regulatory reforms and strategic shifts discussed include:
Professional Elevation: The Compliance Officer is now a Key Managerial Personnel (KMP), positioned no more than one level below the Board to ensure governance is integrated into core decision-making.
Market Rumour Verification: The top 250 listed companies are now mandated to confirm, deny, or clarify market rumours following material price movements to enhance market transparency.
IPO and Disclosure Reforms: Introduction of abridged prospectuses at the draft stage and clearer advertisements for Main Board vs. SME listings to improve investor comprehension.
Transition to Advisory: Company Secretaries are evolving from compliance officers into governance advisors, tasked with exercising judgment in “grey areas” where actions may be technically permissible but institutionally uncomfortable.
Committee Efficacy: A push to ensure Audit and Nomination committees move beyond “ceremonial bodies” to become active forums for genuine oversight and identifying patterns in related-party transactions.
What is the significance of “Foresight Governance” in the context of capital markets? Foresight Governance represents a shift from reactive compliance to an anticipatory model where professionals recognize early “red flags”, before trust is eroded. It requires the courage to speak truthfully in boardrooms and the ability to evaluate how current corporate actions will be perceived by discerning investors and regulators in the future, thereby serving as a custodian of market confidence.
Policy Relevance
SEBI’s reforms aim to strengthen governance while facilitating the Ease of Doing Business, ensuring that regulations are deeply internalized rather than just mechanically applied. As capital markets facilitate average annual issuances of ₹9.6 trillion, maintaining high governance standards is critical to preventing “governance uncertainty,” which markets struggle to tolerate. These measures protect the interests of a diverse investor base and are essential for India’s continued global market integration.
Relevant Question for Policy Stakeholders: How can India institutionalize horizontal career tracks and professional “courage” within the KMP framework to ensure that governance advisors can effectively challenge boards even under high commercial pressure?
Follow the full news here: SEBI Address: 25th ICSI National Awards for Excellence in Corporate Governance