The Securities and Exchange Board of India (SEBI) has begun work on introducing mandatory, biannual workshops for independent directors, with attendance likely to be linked to their reappointment after completing a five-year tenure, according to people familiar with the development.
The initiative is in collaboration with the National Institute of Securities Markets (NISM) and the Bombay Chartered Accountants Society (BCAS), which has already submitted a draft curriculum to the regulator. The proposal is currently undergoing review.
The first set of workshops is tentatively planned for September or October, followed by another round in March. These will continue every year, aimed at institutionalising a continuous training cycle for board members, a source said.
The move follows heightened scrutiny after the early exit of HDFC Bank’s chairman, raising questions of boardroom functioning and the role and effectiveness of independent directors.
Following the episode, SEBI Chairman Tuhin Kanta Pandey said that the regulator will come up with a capacity building joint initiative for independent directors to strengthen boardroom capabilities. He also said there is a need for a “continuous, structured and collaborative approach to learning” for board members, as companies face increasingly complex regulatory and business environments.
Under the plan, independent directors will be required to undergo training at least once every five years, creating a system akin to continuing professional education norms applicable to other professions. These workshops will be conducted twice every year.
“Chartered accountants are required to complete continuing professional education (CPE) hours every year, whereas independent directors currently do not have such a requirement. These workshops are expected to become an equivalent regulatory mandate,” said a person aware of the discussions.
Regulatory updates
The curriculum is expected to cover regulatory updates, fiduciary responsibilities, risk governance, and emerging areas such as technology and cyber risks, though final details are yet to be formalised. It may also include case studies on governance failures and evolving expectations from audit committees and board-level oversight, another source said.
Once SEBI approves the curriculum, BCAS and NISM will further work on it and conduct the workshops. SEBI may mandate the same through a circular and in regulations.
At present, independent directors must meet eligibility criteria and register with the Ministry of Corporate Affairs databank, but there is no mandatory requirement for ongoing training. The proposed initiative is expected to address this gap by moving towards a system of continuous professional development and periodic upskilling.
There has also been a growing emphasis on the ability of boards to anticipate risks, scrutinise related-party transactions, and respond to evolving compliance requirements, areas where regulators believe capacity gaps persist. Discussions within regulatory and market circles are focused on how independent directors evaluate management decisions and governance processes, especially in large listed entities.