National Stock Exchange: Failure of Corporate Governance

The case explores the corporate governance challenges that arose at the National Stock Exchange (NSE), India’s leading stock exchange. Chitra Ramkrishna served as the Managing Director and Chief Executive Officer (MD and CEO) of NSE from 2013 to 2016. In 2013, she was recognized by Fortune magazine as one of the most powerful women in business. In 2015, following a whistleblower’s complaint about preferential access given to certain brokers, Indian regulators launched investigations. Further allegations in September 2016 claimed that the appointment of Anand Subramanian, a close associate of Chitra Ramkrishna, violated the code of conduct. Anticipating potential dismissal over these alleged lapses, Ramkrishna resigned from the board in November 2016. Subsequent investigations revealed ongoing preferential access for select brokers during Ravi Narain’s tenure as NSE’s MD and CEO from 2010 to 2014. Narain had been a key mentor to Ramkrishna and strongly supported her appointment as CEO. It was also discovered that Ramkrishna continued to share confidential NSE information with Subramanian even after his termination. Despite these serious irregularities, the NSE board remained notably inactive. This case is significant as it highlights the NSE board’s failure to uphold its core responsibilities, allowing misconduct and irregularities to persist. It concludes by presenting the dilemma NSE’s new CEO and board of directors faced: how to address investor concerns while enhancing the organization’s leadership and governance structure.