This fiscal year is set to be an action-packed period for director posts as top search companies are also witnessing a doubling of the number of independent directors reaching out to them looking to build a new portfolio of company boards as they head to the end of their terms.
The Companies Act, 2013, allows a maximum of two 5-year terms each for independent directors.
According to data of 680 listed companies above market cap of ₹5,000 crore analysed by executive search firm Native, the number of independent directors who will compulsorily need to retire by March 2024 is more than 800. Potential vacancies for independent directors across listed companies, including firms below ₹5,000 crore market cap, is more than 1,200, according to Native’s estimate.
“We see a massive demand for independent directors across listed companies in the light of the compulsory retirement due in 2023 as per companies act provisions,” said Varun Sidana, partner corporate functions hiring, Native, which is currently running several independent board roles across large corporates.
“We see almost a doubling of non-executive director searches, aided by an enhanced interest both from demand and supply side this year,” said Suresh Raina, partner at global leadership advisory firm Heidrick & Struggles. “On the one hand, boards have already started thinking about reconstitution, with the imminent churn ahead,” said Raina.
“On the supply side, we are already in touch with the top candidates, who are always highly selective,” he said.Skills in Environmental Social & Governance (ESG), digital and technology are high in demand at Indian boardrooms, according to a report on corporate governance by Russell Reynolds Associates shared with ET.