A spotlight on India

Overview

Overview: In FY 2023 and FY 2024, India’s corporate governancelandscape showcased significant developments as regulatoryreforms, heightened shareholder activism, and evolvingenvironmental, social, and governance (ESG) trends shaped thegeneral meeting (GM) season. Companies demonstrated anincreasing focus on transparency, diversity, and shareholderengagement, reflecting the country’s maturing corporate ecosystem.

Participation Trends AGM:

AGM participation rates in India remained robust, with averageattendance levels among large-cap companies increasing year-on-year. FY 2024 saw participation rates reaching approximately78.5%, compared to 77% in FY 2023. This rise is attributed togrowing retail investor interest and improved digital accessibilityfor hybrid or virtual meetings. Mid-cap and small-cap companiesalso reported improved quorum levels, supported by regulatorymandates for e-voting and webcasting.

Board Composition and Elections

Support for director elections remained high, averaging over 93% in FY2024, a slight increase from 92% in FY 2023. Key drivers include greater emphasis on board diversity and alignment with global governance standards. The percentage of women directors on boards of NIFTY 500 companies rose to 19.8% in FY 2024 from 18.6% in FY2023, reflecting efforts to comply with regulatory requirements and investor expectations. However, concerns over boarding and tenure of independent directors persisted, with notable dissent observed in specific high-profile elections.

Remuneration

Executive remuneration remained a focal point during AGMs. In FY2024, 86% of remuneration proposals were approved, up from 84% in FY 2023. While most proposals aligned with shareholder expectations, a few cases highlighted issues around pay-for-performance alignment and quantum. For example, dissent arose over certain companies exceeding industry benchmarks without adequate justification. Improved disclosure practices, including enhanced clarity on key performance indicators (KPIs), contributed to the overall positive trend.

ESG and Sustainability

ESG-related resolutions gained traction in FY 2024, with proposals addressing climate action, sustainability reporting, and diversity targets. Companies in sectors such as energy, IT, and finance were at the forefront of this shift, leveraging ESG initiatives to attract long-term investors. Approximately 68% of companies in the NIFTY 100voluntarily disclosed ESG metrics in FY 2024, up from 60% in FY2023. The Securities and Exchange Board of India’s (SEBI) Business Responsibility and Sustainability Report (BRSR) framework has been a key enabler in driving these disclosures.

Shareholder Activism

Shareholder activism in India intensified during this period, with investors challenging companies on governance practices, executive pay, and ESG commitments. Noteworthy cases in FY2024 included campaigns for increased transparency in related-party transactions and demands for improved climate-related disclosures. Activists’ reliance on digital platforms for mobilisation and advocacy amplified their impact, particularly among retail shareholders.

Regulatory Developments

SEBI’s continued focus on corporate governance reforms significantly influenced AGM dynamics. Key regulatory updates in FY 2024 included enhanced guidelines for independent directors, stricter disclosure norms for related-party transactions, and frameworks for ESG reporting. These measures have improved accountability and alignment with global standards.

¹ This content was published December 2024 in MUFG Intime India Private Limited’s General Meeting Season