New Delhi, India – February 2026: Excellence Enablers has published the 118th edition of its newsletter, featuring an article titled “Board Proposes, Management Disposes?” by M. Damodaran, Chairperson of Excellence Enablers and former Chairman of SEBI, UTI and IDBI.

The article examines corporate governance questions arising from the Securities Appellate Tribunal (SAT) orders dated December 5, 2025, in relation to an appeal concerning PTC India Financial Services Limited (PFS).

The discussion focuses on the relationship between the Board of Directors and management and asks an important governance question: how can Boards effectively discharge their responsibilities when their directions are not implemented by management?

The article refers to the resignation of three Independent Directors of PFS in January 2022, who had raised concerns relating to corporate governance. It discusses several issues considered during the proceedings, including the appointment of a Whole Time Director and Director (Finance), delayed reporting, Board directions, communication with the Chairman, changes to sanction terms, access to legal counsel for Independent Directors, and the reconstitution of the Audit Committee.

A central theme of the article is the position of the Board within the corporate structure. It highlights that the Board of Directors is the superior authority to the Managing Director and CEO in matters falling within the Board’s authority. The article therefore raises questions about the responsibility of management when Board decisions are not implemented.

The article also considers the role of Independent Directors and the importance of responding appropriately to their concerns. The resignation of Independent Directors and their communications with the regulator demonstrate why effective Board processes, access to information and meaningful governance mechanisms are important for corporate oversight.

Another issue discussed is the interaction between companies and regulators. The article questions whether communications from a regulator concerning matters such as Board structure and Audit Committee composition should be viewed merely as advisory communications or as directions requiring compliance.

The newsletter does not attempt to examine every legal finding of the SAT order. Instead, it looks at the developments primarily through the lens of corporate governance, focusing on the structural and practical aspects of how companies are governed.

The article concludes by suggesting that SEBI and the Ministry of Corporate Affairs may consider providing greater clarity on the responsibility of management to implement Board directions. According to the article, preserving the authority and sanctity of the corporate structure is important for effective corporate governance.

The 118th edition provides readers with an opportunity to consider broader lessons concerning Board effectiveness, management accountability, Independent Directors, regulatory oversight and corporate governance practices.

About Excellence Enablers

Excellence Enablers is a corporate governance-focused organisation that works with Boards and governance professionals. Its work focuses on adding value to governance processes rather than merely ensuring compliance.

Author: M. Damodaran
Chairperson, Excellence Enablers
Former Chairman, SEBI, UTI and IDBI

Website: www.excellenceenablers.com