SME IPO Readiness · Question

How should the board be set up before an SME IPO?

Short answer

Build a board with a balanced mix of promoter-executive directors, non-executive directors and the required number of independent directors, include a woman director as the law expects, and constitute the committees listed companies must have. Appoint the key managerial roles of a managing head, finance head and company secretary. Do this well before filing so the board can show a working record.

In more detail

A listed company's board is meant to protect minority shareholders, not just run the business. Reviewers and investors look at whether directors are genuinely capable of questioning management, and whether committee work is documented in minutes.

Promoter-family boards often consist only of relatives. That structure works privately, but a listing requires a different shape.

The usual building blocks are these.

Executive directors, typically promoters running daily operations.
Non-executive directors who bring outside experience but do not manage.
Independent directors, free of material ties to the company or promoters, in the proportion required by current rules.
Committees such as audit, nomination and remuneration, and stakeholders relationship, with defined charters.
Key managerial personnel, including the head of the company, the finance head and a company secretary.

Recruit independent directors early and check their background, availability and ability to read financial statements. Good candidates often come from professional networks, retired executives, finance or legal practice. They also assume personal liability, so expect them to ask careful questions before joining.

Hold meetings regularly for a few quarters before filing, with proper agendas and minutes. A board that meets only to sign papers shows up in the review.

Control concerns are real but manageable

Promoters worried about losing say should note that independent directors advise and oversee; they do not hold voting control. The shareholding structure, not the board seat count, decides control.

Exact numbers and eligibility criteria change with regulation, so confirm the current framework with your company secretary and merchant banker.

Key points

Board composition must move from family-only to a mix with independent oversight.
Committees need written charters and minuted meetings, not just names on paper.
Key managerial roles, including a company secretary, must be filled and documented.
Start months ahead so there is a track record of functioning governance.

Who this applies to

Promoter families whose current board consists mainly of relatives.
Companies still without a dedicated finance head or company secretary.
Directors weighing how their roles change after listing.

Last reviewed 3 October 2026

This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority. Lalsar Holdings' financial advisory and financing work is advisory and facilitation only. Lalsar Holdings is not a lender. Sanction and disbursement of any credit facility is at the sole discretion of the partner bank, NBFC, or financial institution involved, subject to their own eligibility criteria and credit policy.