Former Securities and Exchange Board of India (SEBI) chief M Damodaran, now the founder of governance consultancy Excellence Enablers, has been locked in a rare public dispute with several proxy advisory firms over their criticism of his appointment to the board of a listed company. The disagreement has sparked a broader discussion about corporate governance practices and the role of proxy advisers in India’s markets.
Proxy advisory firms, which provide voting recommendations and governance assessments to institutional investors, raised concerns about Damodaran’s recent board role, questioning potential conflicts and the implications of past matters recorded in settlement orders. These firms play an influential role in shaping shareholder voting outcomes and governance oversight, given their assessments on issues ranging from director independence to executive compensation.
In response, Damodaran has publicly challenged the relevance and authority of these proxy advisers, critiquing their structures and disputing the basis of their objections. He has pointed to a working group report from seven years ago that shapes some of their governance criteria, arguing that the framework may not be appropriate for assessing current board appointments. His rebuttal reflects deeper tensions between governance experts and the advisory firms that influence institutional investor decisions.
The clash highlights broader questions about corporate governance standards in India, including how governance lapses are addressed and whether the mechanisms used by proxy advisory firms are always aligned with regulatory intent. The debate underscores the complexities involved in balancing regulatory experience, market oversight, and independent governance evaluations in a rapidly evolving capital market.
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