Investor stewardship priorities for India

India remains a popular emerging market for investors, with listed companies in sectors such as financial services, technology, and manufacturing. EOS has been engaging with Indian companies, policymakers and standard-setters for over a decade, and in recent years we have seen improvements in certain governance areas. However, there are some specific stewardship challenges within the Indian market that minority shareholders need to navigate to ensure that their own rights are protected.

A high proportion of Indian companies are still family-owned and led by promoters, a term unique to India, which refers to individuals with direct or indirect control over a company. In some cases, family members and promoters who are interested in ensuring sustained growth may foster a long-term focus, which can be well-aligned with minority shareholder interests.

However, there is increasing scrutiny over related party transactions, which can give rise to potential conflicts of interest, and executive remuneration. Here there is scope to increase transparency, introduce more objectivity into decision-making, and establish pay structures that properly incentivise delivery on long-term strategy.

Boards and management teams should focus on establishing governance structures that enable long-term value creation. Improvements in governance are likely to increase trust in the market and make India even more attractive to international investors. For example, independent directors have a responsibility to engage directly with shareholders to exchange views on governance and other strategic matters. While board-level engagement is not yet the norm in India, we expect to see a shift in access in coming years, as independent directors begin to recognise that investor dialogue can help them perform effectively.

To find out more, read the full article in our Q1 2025 Public Engagement Report.