The shortfall isn’t new: 17 companies have remained below the required threshold continuously from FY22 through FY25, highlighting a persistent governance lapse across more than a dozen PSUs.
The Companies Act requires every listed company to appoint independent directors constituting at least one-third of its total board strength.
The Department of Public Enterprises (DPE) guidelines further stipulate that where the chairperson is an executive director, independent directors must account for at least 50% of the board. For unlisted PSUs, at least one-third of directors must be independent.
Excellence Enablers notes that three unlisted companies were non-compliant in each of FY23, FY24 and FY25 for failing to meet the mandated threshold, underscoring that governance slippages are not confined to listed entities alone.
The report also reveals a sharp skew in board composition across listed PSUs. In FY22, the highest number of independent directors on a single board was eight, a level seen in three listed companies.
That peak of eight was recorded in one listed company each in FY23 and FY24, before dropping to five in FY25. At the other end of the spectrum, the lowest count has deteriorated markedly.
Two listed companies had just one independent director in FY22, and eight had two in FY23. By FY25, however, as many as 17 listed companies had no independent directors at all.