INSTITUTIONAL EYE Indian Boards: Structure and Breadth 14 May, 2021

13 May 2021: It its recent report ‘Indian Boards: Structure and Breadth’, IiAS has evaluated the board composition of NIFTY 500 companies as on 31 December 2020.

These 500 companies account for ~96% of the total market capitalization of the NSE.

The key findings are:

  • NIFTY 500 companies had a total of 4559 directors out of which 1217 were Executive Directors and 3342 were Non-Executive Directors

    +Of the 1217 Executive Directors, 709 were Professionals and the remaining 508 were from the Promoter family

    • Of the 3342 Non-Executive Directors, 2249 were Independent Directors (IDs), 563 were from the Promoter family, 299 were Nominee Directors and 231 were classified as others
    • 375 companies out of the NIFTY 500 had boards comprising Independent Directors to be 50% or more of the board strength.
  • The number of directors has declined by 6% in the last three years, with 235 fewer non-executive directors, and 20 fewer executive directors. This directly translates into a smaller board size. The average board size which was 9.6 in 2018 has shrunk to 9.1 by 2020

    • Executive directorships have not witnessed any major change in the mix over the past three years. Professionals continue to account for a large share of the overall executive roles.
    • The total number of Independent directors (IDs) have decreased in 2020 as compared to 2019 and 2018. This reduction can mainly be attributed to the reduction in the number of IDs in PSU companies. The other reason for the decrease in IDs has been churn in the companies forming part of NIFTY 500 over this period. The outgoing companies in the NIFTY 500 in 2020 when compared to 2019 had 208 IDs on their boards while the incoming companies had 188 ID, whereas when compared to 2018, the outgoing companies in 2020 had 395 IDs on their boards while the incoming companies had 331 IDs.
    • 14% (70 companies) were non-compliant with board composition norms. Out of these 70 companies, 55 companies were PSUs. Board independence has long been a problem for PSUs. PSUs in the NIFTY 500 companies, needed to appoint around 141 independent directors to their board to be in compliance with the listing guidelines.


  • Women form 17% of all board directorships of NIFTY 500 [compared to ~6% in March 2014]
  • Despite 95% of the NIFTY 500 companies having at least one-woman director on board, women representation in executive positions remains low at ~11%
  • 21 companies out of the NIFTY 500 companies had a female Chairperson, despite the steadfast increase in women directorships over the years.
  • 475 companies had at least one-woman director on the board. Of the remaining 25 companies, two are institutionally controlled, two are promoter run and the remaining 21 are PSUs.
  • Only 5 companies had women representation of 50% or more on their board


  • 286 of the NIFTY 500 companies had Non-Executive Chairpersons, of which 249 companies had Chairpersons not related to the Managing Director or CEO of the company
  • 14 of the NIFTY 500 companies had a Chairperson Emeritus.


  • For 2020, out of the NIFTY 500 companies, four companies had IDs with tenure greater than 40 years and 19 companies had IDs with tenure greater than 30 years on their boards
  • The maximum tenure of an Independent Director in a NIFTY 500 is 55 years.
  • 245 companies out of the NIFTY 500 companies had at least one tenured (more than 10 years on the board) independent director on their board.
  • The average age in the youngest board is 40.6 years whereas the average age in the oldest board is 79.3 years in NIFTY 500
  • 52% of the total directors on NIFTY 500 boards were aged 60 years and above and 19% were aged 70 years and above. Further, 12 companies still had directors aged 90 years and above on their boards. 9 companies have directors who are aged less than 30 years and 27 companies have directors who between 30 and 35. All these are promoter-owned companies.

The report has also looked at the NSE-500 companies in comparison to S+P 500. NIFTY 500 Vs S+P 500

  • 49% of all directors in NIFTY 500 were IDs compared to 85% IDs in S&P 500
  • The average director tenure (in years) in NIFTY 500 is 8.2 compared to that of S&P 500 of 7.9
  • 41% of NIFTY 500 companies have an average board age of 59 or less compared to 16% of S&P 500 companies
  • 22% and 12% of Boards in NIFTY 500 and NIFTY 50 have an independent chairperson respectively compared to 34% in S&P 500

*Note – All data as on Dec 31, 2020

Commenting on the findings, Amit Tandon, Managing Director, IIAS, said, “Board composition is difficult to change; independent directors now have a tenure of five years, and most get re-appointed for a further five-year term. Further, regulations ‘grandfathered’ independent director tenure till 2014, suggesting that the pace of change will be slow. However, the companies need to work towards instituting balanced and more efficient boards with greater clarity on the role, skill mix and more effective checks and balances.”

Hetal Dalal, President, IIAS, said “The regulators continue to do their part and tighten regulations for incorporating sound corporate governance practices. But ultimately effective governance rests with the board who determine its composition and structure.”

“One can argue that some of the directorship gaps cited in this study may be transitory: companies have six months to comply. But rather than look at this as point-in-time data, which it is, we need to put greater focus on the trends.” Hetal Dalal added.

You can download the full report here

  • Tags:
  • Board Of Directors
  • Boards
  • PSU's

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