Median governance score of BSE 100 climbs to 63, reflects wider corporate improvements

The 2025 assessment of the Indian Corporate Governance Scorecard indicates a more mature governance landscape, with the focus shifting beyond formal compliance toward the quality of oversight, resilience, transparency, and long-term value creation.

Institutional Investor Advisory Services India Limited (IiAS) has released the 10th edition of the Indian Corporate Governance Scorecard, marking a decade of tracking the evolution of governance practices in corporate India.

The 2025 findings show a steady and broad-based improvement in governance standards across the BSE100. The median score rose to 63 in 2025 from 61 in 2024, while the highest score remained at 82. The improvement was not driven by a few outliers but reflected incremental strengthening across a wider set of companies.

The IiAS Indian Corporate Governance Scorecard is a structured, principles-based framework designed to objectively assess governance standards among leading Indian listed companies. It is anchored in the G20/OECD Principles of Corporate Governance, ensuring alignment with globally accepted governance benchmarks while being tailored to India’s regulatory and ownership landscape.

Talking to Bizz Buzz, Amit Tandon, Founder & Managing Director of IiAS, says, “As the Scorecard evaluates governance through a calibrated and transparent methodology.”

The framework draws from the G20/OECD governance pillars but adapts them to focus specifically on company-level practices and conduct within India’s existing regulatory framework, he said, adding, “This ensures that the assessment measures how companies govern — not how regulations are designed.”

The Indian Corporate Governance Scorecard is anchored in the G20/OECD Principles of Corporate Governance and assesses company-level governance practices across four equally weighted pillars like rights and equitable treatment of shareholders, sustainability and resilience, disclosures and transparency, and responsibilities of the board.

The 2025 scorecard comprises 74 questions, each scored on a three-point scale of 0, 1, or 2, and aggregated into a final score out of 100. The scoring framework is designed to distinguish between baseline compliance, reasonable practice, and global best practice.

This year’s ‘Leadership’ category comprises 10 companies. They include Asian Paints, Axis Bank, Cipla, Dr. Reddy’s Laboratories, HDFC Bank, HDFC Life Insurance, ICICI Lombard General Insurance, Infosys, Mahindra & Mahindra and Marico.

The ‘Next Leaders’ category comprises Bharti Airtel, HCL Technologies, Hindustan Unilever, Kotak Mahindra Bank, Max Healthcare Institute, Tata Consumer Products, Tata Power and Wipro.

The threshold for the Leadership category was raised in 2022 from 70 to 75. On the earlier threshold, all current Next Leaders would have qualified for the Leadership category.

As of November 30, 2025, independent directors accounted for 51.5 percent of board positions across BSE100 companies, up marginally from approximately 50 percent in 2024.

Long-tenured independent directors now account for just 1 percent of board positions, down from 1.5 percent a year earlier, reflecting the impact of mandatory rotation. However, 13 of the 16 PSUs in the index continued to fall short of minimum regulatory requirements for board composition.

The number of BSE100 companies with at least one independent woman director rose to 94 in 2025, from 90 in 2024. Yet women continue to hold only 18 percent of board seats - unchanged from the prior year - and only five companies in the BSE100 have women as chairpersons.

For diversity to be genuinely meaningful, women should comprise at least 30 percent of boards in our view.

Pay-for-performance alignment remains a concern. In 2025, only 44 BSE100 companies demonstrated credible alignment between executive pay and performance, down from 52 in 2024.

In the 18-month period ended September 30, 2024, approximately 25 percent of promoter remuneration resolutions were approved solely on account of promoter votes, highlighting an unresolved conflict of interest.

Succession planning continues to be largely informal and opaque, particularly in family-run businesses. Of the 100 companies reviewed, only seven provided a succession framework that went beyond a high-level outline. In our view, succession must be structured, merit-based, and insulated from family dynamics if it is to provide boards with the credibility that investors expect.

In 2025, 92 BSE100 companies had board members overseeing sustainability practices, up from 88 in 2024, and 73 companies had aligned initiatives with the UN Sustainable Development Goals. However, progress on climate transition disclosures was uneven, with only 30 companies disclosing net-zero or carbon-neutral targets backed by action plans- down from 35 in 2024

The IT sector retained its leadership position in 2025. Consumer discretionary, financial services, and healthcare recorded year-on-year improvement.

Widely held companies continued to score the highest with a median of 67, followed by MNCs at 64 and promoter-led companies at 63. PSU companies remained at a median of 55.