FTI Consulting, Inc. this week announced the release of its India Disclosure Index 2023 report, which tracks corporate disclosure practices amongst India’s 100 leading publicly listed corporations.
The report reveals that the Nifty 100 companies have an average corporate disclosure score of 6.5 out of a maximum of 10.
FTI Consulting analyzed public information from annual reports, using 18 disclosure parameters and applying them to the Nifty 100 Index to create the India Disclosure Index 2023 report. The 18 disclosure parameters were divided into two groups to measure leadership and governance quality and risk disclosure quality.
India Disclosure Index 2023 Highlights
• There are nine ‘Corporate Disclosure Champions’ in the Nifty 100 – with Corporate Disclosure scores of 9/10 or above, with only one company, Infosys, scoring a perfect 10. Five of the nine champions are from the Tech and telecom sectors.
• Telecom & Tech companies have the highest average Corporate Disclosure score of 8.9/10, followed by Energy & Natural Resources with an average score of 7.2/10.
Leadership and Governance Quality (LGQ) Scores
Governance gaps are evident: 16 of the 20 companies lack third-party board evaluations, and 12 do not have anonymous whistle-blowing mechanisms and metrics.
Here are the main findings with reference to governance and succession planning
• Succession Planning — More than 75 of the Nifty 100 disclosed that they have clear succession planning processes in place for senior leadership.
• Independent Board Evaluation — 76 of the Nifty 100 do not have independent board evaluation by a third party.
• Anonymous Whistleblowing Mechanisms and Metrics — 48 of the top 100 Indian companies do not have an independent mechanism and metric to track anonymous whistleblowing.
• Diversity — Only 38 of the top 100 companies have more than 20% women employees in their workforce.
Five companies have over 40% women employees in their workforce: Page Industries (75%) SBI Cards (52%), Interglobe (44%), Samvardhan Motherson (43%) and Infoedge (41%).
10 companies have over 30% of women employees in their workforce: TCS, Infosys, Wipro, Tech Mahindra, ICICI Bank, LTI Mindtree, Canara Bank, Apollo Hospitals, Avenue Supermarts and Britannia.
• Inclusion — Top 100 companies together have 23,922 ‘differently abled’ employees, 46% of which are employed by four state-owned enterprises: Canara Bank, Bank of Baroda, Hindustan Aeronautics Ltd and State Bank of India (each employing over 2% of its workforce from the disabled community).
Risk Disclosure Quality Scores:
• Talent Attrition Risk — Fewer than half (49) offer flexible work policies post-lockdown.
• Policy and Regulatory Risks — 71 have adequately prepared for policy and regulatory changes that may have a material impact on their business.
• Supply Chain Resilience — 74 of the Nifty 100 disclose that they have adequately prepared for risks relating to supply chain disruptions and have taken mitigation steps.
• Climate Change Risks — 44 of the top 100 Indian companies do not provide adequate information on climate risk mitigation planning for net-zero carbon pathways.
• Cyber Risks — 47 of the top 100 Indian companies do not undertake regular cyber audits or training to build preparedness and resilience to a cyber breach incident or ransomware attack.
Commenting on the India Disclosure Index 2023 report, Amrit Singh Deo, senior managing director in the Strategic Communications segment at FTI Consulting and author of the report, said, “The India Disclosure Index report helps companies measure how they fare on leadership and governance, as well as risk disclosure.
Post-lockdown, companies have had to refresh enterprise strategies, improve risk management and demonstrate resilience by focusing on talent retention and mitigating risks related to climate change, cyber and supply chain. Investors and regulators are demanding more demonstrable, metrics-based progress on these parameters from companies. A higher standard of voluntary disclosure is a good proxy for governance and leadership as well as risk management.”