Necessary, but Not Sufficient
Education companies already owe the full corporate governance spine. But the law of the boardroom does not reach the four things that actually define an education business.
The spine is the easy part
Between 2002 and 2006, I worked with the Institute of Company Secretaries of India (ICSI), where corporate governance was one of the areas I worked on; our team built the questionnaire and evaluated companies for the ICSI National Award for Excellence in Corporate Governance, while an independent jury chose the winners. The companies that scored well had the apparatus right: independent directors, an audit committee, clean related-party disclosure. That apparatus is settled law now, and any well-run education company can put it in place.
For an education company, an edtech platform, a school or college chain run through a company, a coaching or test-prep business, that apparatus is necessary. It is not sufficient. A company can have a textbook board and still fail the people it exists to serve, because the things that define an education business, the data of children, the truth of its promises, the fairness of its fees, and the tension between investor returns and learning outcomes, sit largely outside what corporate governance was built to police.
A spine, and an overlay
Unlike a school or a university, an education company is already inside the corporate governance system. The Companies Act, 2013 and, for listed players, the SEBI listing rules give it directors' duties, independent directors, an audit committee, related-party controls and a whistle-blower mechanism. That is the spine, and it is genuinely demanding.
An education company can pass every corporate governance test and still mishandle a child's data, sell a guaranteed rank, or keep a fee it should refund. The spine does not reach those. The overlay does.
The reset that ran through Indian edtech, growth and valuation outpacing financial discipline and board oversight, was, in part, a corporate governance failure. But the deeper lesson is that the companies which endure will be those that govern the education-specific duties as seriously as the financial ones. That is the overlay, and it is where this article spends its time.
The spine the law already requires
Start with what is settled. The Companies Act, 2013 imposes a real governance discipline once a company reaches scale, and it applies whether or not the company is listed.
Board, committees and conflicts
Directors owe codified duties under Section 166: to act in good faith, with due care and independent judgement, and to avoid conflicts of interest. Listed companies must seat independent directors and run an Audit Committee and a Nomination and Remuneration Committee. Unlisted public companies cross into the same obligations once they pass prescribed thresholds, broadly, paid-up capital of Rs 10 crore, turnover of Rs 100 crore, or aggregate borrowings above Rs 50 crore. Private companies, which most edtech ventures are, fall outside these board-composition and committee mandates whatever their size, so adopting them is a voluntary mark of seriousness. Related-party transactions are governed by Section 188, which requires board approval, shareholder approval above prescribed limits, and disclosure in the board's report, with an arm's-length, ordinary-course carve-out. Larger companies must also spend on corporate social responsibility under Section 135 and maintain a whistle-blower mechanism. For a listed education company, the SEBI listing rules add a hard floor: at least one-third of the board independent, rising to one-half where the chair is an executive or promoter, and mandatory board committees, with a risk management committee for the largest listed entities.
This spine is well understood and, frankly, the easy part. A competent company secretary and a serious board can implement all of it. The harder question is everything the spine does not touch.
What corporate governance does not reach
Four duties define an education business, and a generic audit committee and related-party policy do not, on their own, govern any of them. Each has its own, mostly recent, source of law.
The children's data of a generation
The sharpest of the four is data. The Digital Personal Data Protection Act, 2023 (DPDPA) defines a child as anyone under 18 and, in Section 9, requires verifiable parental consent before processing a child's personal data, and bars behavioural tracking and targeted advertising directed at children. For an edtech company that runs on enrolment, assessment and engagement data about minors, this is a board-level risk, not a back-office compliance task. The DPDP Rules were notified in November 2025 and the children's-data obligations are phasing in over the period to 2027: the duty is now settled, and the clock is running.
The truth of the promise, the fairness of the fee
The second and third duties are about honesty toward families. The Central Consumer Protection Authority (CCPA), under the Consumer Protection Act, issued guidelines against misleading advertisements in 2022 and, in 2024, specific guidelines for the coaching sector that prohibit claims of guaranteed selection, rank or marks, and require a successful candidate's testimonial to be used only with written consent obtained after selection. The Advertising Standards Council of India (ASCI) code separately requires educational advertising to be truthful and substantiated. Alongside, the Ministry of Education's 2024 guidelines for coaching centres advise transparent fees and pro-rata refunds on mid-course withdrawal. Truthful claims and fair fees are no longer matters of conscience alone; they are compliance duties a board must own.
The tension that defines the sector
The fourth duty has no single statute: it is the structural tension between the returns investors expect and the learning outcomes the company exists to produce. No audit committee resolves it. It has to be governed by a board that puts outcome integrity into its own reporting and incentives, so that growth never quietly overrides the education.
| Education-specific duty | In the Companies Act / SEBI? | What actually governs it |
|---|---|---|
| Children's personal data | Not addressed | DPDP Act 2023, Section 9 (parental consent; no targeting of under-18s) |
| Truthful outcome and claims advertising | Not addressed | CCPA Coaching Guidelines 2024; ASCI education code |
| Fee and refund fairness | Not addressed | CCPA 2024; Ministry of Education coaching guidelines 2024 |
| Learning outcomes vs investor returns | Not addressed | Board judgement; no single statute |
Read the middle column: the corporate spine is silent on all four. That is not a criticism of company law, whose job is the enterprise, not the classroom. It is the reason an education company needs a deliberate governance overlay.
A governance code for education companies
The work is in two layers: run the corporate spine well, and then add the education overlay that the spine does not reach. Eight practices, all adoptable by a serious board now.
Constitute the committees in spirit, not at the threshold
The spineAudit and nomination committees (Companies Act Sections 177 to 178; SEBI LODR).
In an education companyDo not wait for the legal threshold. A growing edtech handling fees, learner data and investor capital benefits from an audit and risk committee, and an independent voice on the board, well before the Companies Act compels it. Governance maturity ahead of obligation is itself an investor signal.
Independent directors with the right expertise
The spineIndependent directors (Companies Act Section 149; SEBI LODR Reg 17).
In an education companySeat independent directors who understand data protection, consumer law and education outcomes, not only finance. The risks that sink education companies are sector-specific; the board's independent expertise should match them.
Govern related-party transactions, especially across arms
The spineRelated-party transactions (Companies Act Section 188).
In an education companyThe acute case in education is a promoter who runs both a not-for-profit school or college arm and a for-profit company that supplies it. Every dealing between the two must be benchmarked, disclosed and approved at arm's length. Section 188 and the trust's own tax exemptions both depend on it.
Make children's data a board risk
The overlayDigital Personal Data Protection Act 2023, Section 9.
In an education companyPut verifiable parental consent, and a clear bar on behavioural tracking and targeted advertising to under-18s, on the board's risk register now, ahead of the 2027 compliance horizon. Name a person accountable for it. For an edtech, this is as material as the audited accounts.
Gate the claims you make
The overlayCCPA Coaching Guidelines 2024; ASCI education code.
In an education companyNo guaranteed ranks, selections or marks; testimonials only with written consent obtained after selection; every outcome claim substantiated. A board-owned review gate on marketing claims protects both families and the company from regulatory and reputational harm.
Make fees and refunds fair, and transparent
The overlayCCPA 2024; Ministry of Education coaching guidelines 2024.
In an education companyPublish the fee, the refund formula and the exit terms plainly, and honour pro-rata refunds on withdrawal. Fee fairness is now a consumer-protection duty, and it is also the clearest signal of whether a company treats its learners as customers or as captives.
Govern outcomes, not only growth
The overlayStakeholder accountability and ethical leadership (King IV; G20/OECD Principles).
In an education companyPut genuine learning-outcome and learner-satisfaction metrics into board reporting and, where possible, into management incentives. It is the only structural defence against the sector's defining failure mode: growth and valuation overriding the education itself.
A real speak-up channel
The spine, extendedVigil mechanism (Companies Act Section 177(9); SEBI LODR Reg 22).
In an education companyExtend the statutory whistle-blower mechanism beyond financial fraud to mis-selling, data-handling and outcome-integrity concerns, with direct access to the audit committee. The people who see a problem first are usually the staff closest to learners.
Related in this series: governance for schools and higher education institutions. If your company supplies a promoter-linked school or college, the related-party discipline there is the other half of this picture.
Integrity as the next differentiator
The first era of Indian edtech was won on growth and capital. The next will be won on trust, and trust in education is built on exactly the four duties the corporate spine does not reach. Parents are more cautious, regulators are more active, and investors, chastened by the reset, now price governance and conduct into their diligence. The education company that governs its data, its claims, its fees and its outcomes as seriously as its accounts is the one that will still be standing, and still be funded, when the others are not.
Corporate governance is necessary, and it is the easy part. The education-specific duties are harder, less codified, and far more revealing of what a company actually is. Governing them well is how an education business earns the one thing it cannot buy: the trust of the families who hand it their children.