SEBI Chairman: Over-Regulation Can Stifle Growth And Innovation
FinTech BizNews Service
Mumbai, April 17, 2025: Shri Tuhin Kanta Pandey, Chairman, Securities and Exchange Board of India (SEBI) today stated that good corporate governance is the foundation of a successful enterprise. He was addressing the Inaugural session of the 18th Corporate Governance Summit organized by Confederation of Indian Industry (CII) on 17th April 2025. He highlighted that from a regulator’s perspective, high standards of corporate governance in listed entities are essential to protect the interest of the shareholders, especially minority shareholders.
Emphasizing on the importance of corporate governance, he stated that for listed companies, robust governance mechanisms are essential for enhancing investor confidence through transparent disclosures, board independence, and effective oversight.
A company known for strong governance enjoys a positive reputation, which can lead to better credit ratings, easier access to capital, and higher valuations, he observed. He stated that over-regulation can stifle growth and innovation while too little regulation can also lead to decline in trust of stakeholders and adversely impact growth. SEBI Chair emphasized the need for optimum regulation saying regulations need to be rationalized by removing what is no longer relevant, and reducing overlaps. Stable and adequate financial regulation can help in creating a high trust environment, increase attractiveness for investor and promote economic growth, he added.
In his address at the inaugural session of the Summit, Mr Sanjiv Bajaj, Past President, CII, Chairman, CII Corporate Governance Council & Chairman and Managing Director, Bajaj Finserv Ltd. stated that Governance should focus on substance over form, moving beyond compliance to foster genuine behavioural change. He highlighted 5 key corporate governance trends to include the trust imperative, corporate governance from the perspective of key stakeholders; Demands for increased Board oversight; artificial intelligence as the future of governance and culture.
In his address, Mr Chandrajit Banerjee, Director General, CII highlighted that corporate governance is considered a key component of business strategy due to its far-reaching implications. It has become a critical concern for various stakeholders, including governments, regulators, corporations, boards, markets, employees, and investors, he added. He highlighted that CII encourages voluntary adoption of best practices and self-regulation by corporates. He also underlined that CII is keen on helping corporates build and strengthen Trust amongst various stakeholders of a business ecosystem.
The CII Publication titled “The Shared Responsibility of Building & Strengthening Trust” was released at the Summit. This Publication is based on a CII survey of industry leaders on the subject and outlines the connotations of trust, stakeholder ecosystem for business, communication as a catalyst to build trust and technology as a critical trust enabler. The publication suggests 15 action points for companies to build and strengthen Trust. Besides leadership commitment to building and strengthening Trust, these suggestions pertain to establishing corporate purpose and framework for risk and crisis management, supply chain management, conflict management, ensuring regulatory compliance, financial integrity, maintaining ethical practices, adopting technology to strengthen trust, ensuring reliability, consistent delivery on promises, employee engagement and empowerment, customer-oriented approach, commitment to ESG responsibility and building strong partnerships.
Another publication titled “CII Guidebook on Effective Adoption and Governance of AI for Board Leaders” was also released at the Summit. Keeping in view the increasing use of AI in businesses which require effective governance, this Guidebook aims to serve as an effective tool for the Board of directors to navigate the complexities of AI governance and drive better business outcomes. This Guidebook encompasses basic concepts related to AI, its use in various business functions, criticality of AI governance and its framework, risks and challenges in AI and its governance and liabilities of directors associated with deployment of AI in businesses. It defines the essential role of Board engagement in supporting effective and meaningful AI governance.
