Nearly 67 per cent of private companies do not have an adequate risk management function, and over 52 per cent are still not equipped with formal risk management processes, said a report by risk advisory firm MGC Global.

Over 50 per cent of the survey participants were affiliated with companies that reported revenues of over Rs 1,000 crore. It was conducted with an outreach to over 60,000 professionals in management and board-level roles in various sectors in India to assess the corporate governance on a range of pertinent practices in their respective companies, MGC Global said in a release.

According to the survey titled 'State of Corporate Governance in India, 2023', about 67 per cent of closely held companies and 38 per cent of public companies were found to have inadequate practices for risk management. In addition, several companies are at risk of cronyism due to less than one-third of the board being independent directors.

This survey also found out that around 45 per cent of respondents from private companies have less than one-third of their board comprising independent directors. This could lead to cronyism and impact objectivity in decision-making. “This year, we had launched a survey with a wide and cross-sector outreach and had looked closely at the state of governance on the ground,” said Monish G Chatrath, Managing Partner, MGC Global.