India's markets regulator must have a regulatory impact assessment mechanism that tests the relevance of its rules for today’s realities, Meleveetil Damodaran, former chair of the Securities and Exchange Board of India (Sebi), said at the Mint India Investment Summit 2026 on Friday.
“I have been telling Sebi for the last 10 years (to) have an effective regulatory impact assessment mechanism (to) see whether the regulations that are in your books are relevant for today's times,” said the former Indian Administrative Services officer, who was the guest of honour at Mint’s flagship summit.
Many of Sebi’s rules have passed their “sell-by date”, he said, responding to a question on what rule change he would ask the current Sebi leadership to make.
The septuagenarian deflected no questions and eloquently shared his opinion on subjects ranging from environmental, social, and governance (ESG) issues to the sudden resignation of Atanu Chakraborty as the chairperson of India’s largest private-sector bank, HDFC Ltd.
While calling the HDFC episode sad, he clarified that he did not know more about it than what has been publicly disclosed by the bank. However, he said no differences in a boardroom were insurmountable.
He attested to witnessing many boardroom conflicts himself through his extensive experience as an independent director at top Indian companies. A board member should not exit due to differences of opinion, and if they choose to leave, it should be only if they feel that their presence is eroding shareholder value.
“When you leave, leave for the right reasons. And don't do anything which, as you leave, becomes a kind of a parting kick,” he said.
On independent directors
Coming to the rescue of independent directors and members of board audit committees, he said it is wrong to blame them whenever issues in boardrooms become public. “Independent directors are and have been soft targets,” he said. “They don’t have access to information as the whole-time have.”
Advising on board composition, he said three factors were important when appointing independent directors: getting the right people, compensating them adequately, and having robust evaluation for the directors once they are onboarded.
Damodaran had no reservations about investors asking for board representation and membership on key committees, such as audit or remuneration, when investing in listed companies. Large investors have a right to ask for a say in setting a company’s direction, he said.
“I think you cannot shut the door on them after they have brought in large (sums of) money,” he said.
Speaking about companies' ESG responsibilities, the former Sebi chief acknowledged that ESG has faced setbacks globally in recent years. European companies, which have become ESG benchmarks, continue to lead from the front, he said. However, ESG has taken a back seat in the US under the present administration.
“Maybe post the war in West Asia—whenever that happens—when people reflect in a peaceful atmosphere, they might discover that you have to leave the world a better place than you found it,” he reflected.