Why board directors need legal retainers after training

Niranjan Gidwani argues that annual retainer partnerships with ethical legal firms can help directors and CXOs manage rising governance risks, avoid liabilities, and focus on strategic oversight

In today’s business environment, the responsibilities of independent directors and CXOs extend far beyond quarterly reviews and strategy discussions. As Niranjan Gidwani, industry veteran and former CEO of Eros Digital, points out, directors are now personally accountable for decisions that fall under an expanding web of compliance, governance and shareholder scrutiny.
While director training programmes and certifications have grown in recent years, Gidwani suggests that education alone is no longer enough. He highlights the growing case for annual legal retainer ships structured arrangements where boards and senior leaders partner with reputable law firms to provide continuous oversight, preventive advice and crisis management.

“Training gives directors awareness of duties. But when facing complex disputes, regulatory filings, or whistle-blower cases, directors cannot rely solely on memory or intent. A standing retainer with an ethical legal partner ensures timely access to expert counsel and reduces the risk of personal liability,” Gidwani notes.
He adds that such retainerships help directors focus on strategy while delegating the interpretation of evolving statutes to professionals. For listed companies, this could mean fewer surprises in regulatory inspections. For startups, it could protect founders-turned-directors from avoidable litigation.

The argument also comes at a time when Indian courts are increasingly holding directors accountable for lapses ranging from ESG disclosures to cybersecurity oversight. With SEBI, RBI and other regulators tightening compliance frameworks, Gidwani says a retainer is no longer a luxury but a governance necessity.

For companies, the value goes beyond risk mitigation. Properly structured retainers also build credibility with investors, demonstrating that the board is proactive in protecting shareholder interests. “It signals that directors want to focus on creating value while ensuring checks and balances are in place,” he adds. He also adds ” Maybe such services are available already, but not marketed well and no one seems to have taken prime space in this area. Like chartered accounts do for their clients, there should be firms handling the entire file of a director once he or she gets on board. All documentation submissions, meeting deadlines etc”.
Analysts in the corporate governance space agree that the idea of board-level retainerships is still under-discussed in India but may soon become standard practice, especially as director liabilities expand under new laws.

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