Governing board, governance latency and the vulnerable corporate brand

Corporate boardroom HDFC Bank's Sashidhar Jagdishan announced recently that he will retire on October 26, choosing against a third term at the helm of India's largest private lender. The decision comes months after former chairman Atanu Chakraborty resigned in March, citing practices at the bank that sat uneasily with his personal ethics — a phrase precise enough to unsettle a market, vague enough to leave everyone guessing. An external legal review later found no evidence to substantiate the concerns, leaving the sequence open to interpretation. Share price trend tells a story about governance credibility The share price adds a second layer to that interpretation. Media-reported figures put HDFC Bank's decline at roughly 27–28 percent year-to-date, even as rivals ICICI Bank and SBI moved higher over the same period. Share-price performance reflects many forces at work such as earnings vs. expectations, valuation, credit growth, margins and sector rotation among them. Nonetheless, the divergence still raises a useful governance question as to how much confidence the market places in the institution, separate from its numbers? A sudden U-turn Godrej Consumer Products offers the sharper case, precisely because it looked, at first, like the opposite story. Shareholders had just renewed Sudhir Sitapati's mandate for another five years, through 2031. Days later, he resigned. Executive Chairperson Nisaba Godrej's remarks to investors afterward were candid in a way boardrooms rarely allow themselves with rightful praise for his tenure, paired with an unmistakable call for greater urgency and sharper execution from whoever came next. Sitapati's own resignation letter listed the metrics of his five years, an uncommon gesture for an exiting chief executive, closer to a closing argument than a farewell note. Story continues below Advertisement Remove Ad Noteworthy, the stock fell nearly 9.8 percent on the news, and a separate India CEO role, is reportedly returning. The contrast with 2021 sharpens the point further. His arrival then triggered a rally of roughly 15 to 21 percent, on the promise of exactly the discipline the company now seemed to want more of. Same executive, same company, five years apart, and the market delivered almost opposite verdicts each time. Governance latency challenge Markets rarely see the period in which a board absorbs disagreement, extends a mandate, or negotiates succession behind closed doors. Sure, the appointment is visible but the internal debate seldom is and the reversal, when it comes, is unmistakable. What connects Jagdishan's exit to Sitapati's is a question of governance latency. Think in terms of the distance between when a board recognises a problem and when it acts on that recognition in public. It is in this gap that board architecture starts to matter. Models from the West American and British companies generally run on a unitary structure, where executives and independent directors sit within a single board that both manages and oversees itself. Germany, the Netherlands and several Nordic systems use two tiers instead, separating a management board that runs operations from a supervisory board, composed entirely of outsiders, that appoints, monitors and can remove management. The distinction sounds architectural and turns out to be behavioural because each model creates a different channel through which disagreement becomes intervention. Novo Nordisk showed the two-tier model working under real pressure. Its supervisory board removed CEO Lars Fruergaard Jørgensen in May 2025, as Wegovy's lead over Eli Lilly narrowed and the stock fell sharply from its 2024 peak. Five months later, the Novo Nordisk Foundation, the company's controlling shareholder, went further still, replacing more than half the supervisory board itself, with its chair stating plainly that directors had been too slow to read the market. Supervision judged the executive and ownership in turn judged the supervisors which is an uncomfortable sequence, but a visible one, with each layer answering to the layer above it. India's promoter-dominated model India presents a more layered picture again. Indian listed companies operate within a unitary framework, yet the country's promoter model adds an informal layer of influence that sits outside the classic Anglo-American versus continental European divide. In promoter-led businesses, founders and families often shape strategy, succession and board composition well beyond what a formal supervisory structure would require of them, creating a hybrid where the visible architecture comprising the board, committees, independent directors, shareholders, regulators etc runs alongside an informal one built on promoters, legacy and long-term family influence. India presents a more layered picture again. Indian listed companies operate within a unitary framework, yet HDFC Bank carries a parallel logic through the Reserve Bank of India's oversight of senior management and governance in banks, an external supervisory layer bolted onto a unitary frame rather than built into it from the start. Fallout of uncertainty The common thread across all the named companies is a governance rhythm that runs quiet for long stretches and loud for short ones. Boards absorb disagreement, extend mandates, reassess strategy and negotiate succession largely out of view and most of that work never becomes news. The common thread across all the named companies is a governance rhythm that runs quiet for long stretches and loud for short ones. Boards absorb disagreement, extend mandates, reassess strategy and negotiate succession largely out of view and most of that work never becomes news. Then a resignation lands, a strategy reverses, or a mandate is abandoned almost as soon as it was renewed and outsiders are left guessing how long the internal debate ran before the market ever heard of it. That uncertainty is what turns a leadership change into event risk, and event risk, sustained long enough, becomes a brand problem. Institutional promise that is embedded in a corporate brand Corporate brands get treated as a matter of advertising and customer experience, yet at their foundation they represent an institutional promise that the company knows what it is doing, that its leadership is competent, that its board can tell the difference between temporary turbulence and structural weakness and that the institution can correct itself when circumstances change. Corporate brands get treated as a matter of advertising and customer experience, yet at their foundation they represent an institutional promise that the company knows what it is doing, that its leadership is competent, that its board can tell the difference between temporary turbulence and structural weakness and that the institution can correct itself when circumstances change. A boardroom reversal changes what investors, employees and customers believe they know about the institution behind the logo. Story continues below Advertisement Remove Ad The paint had barely dried on Sitapati's new five-year mandate before the board decided the canvas needed a different hand, and the lesson sits less in the reversal itself than in its timing for governance shows its true quality not in the mandates a board hands out, but in the maturity with which it is willing to take one back. Related Stories Buy Brigade Enterprises; target of Rs 900: Motilal Oswal Maruti Suzuki cars to get costlier by up to Rs 20,000 in third hike since May Govt readies telecom PLI successor with significant outlay and components focus, targets Q1 FY28 rol... Markets can live with a bad decision. What's harder to live with is the uncertainty of how long that bad decision had been brewing while everyone waited. Story continues below Advertisement Remove Ad (Shubhranshu Singh is marketer and columnist. India's most rewarded CMO, he has held leadership roles at HUL, Royal Enfield, Visa and Star TV. He was CMO at Tata motors 2021-25.) Views are personal and do not represent the stand of this publication. Shubhranshu Singh is Business leader, cultural strategist and columnist. He is India's most rewarded CMO, he has held leadership roles at HUL, Royal Enfield, Visa and Star TV. He was CMO at Tata motors 2021-25. Views are personal and do not represent the stand of this publication