Independent Director — Defence & Aerospace Manufacturing

Reference: GILA/ID/DEF/2605 Board seat: Independent Director, Non-Executive Location of board meetings: Western India, with at least one meeting annually at a manufacturing facility Term: Five consecutive years, eligible for one re-appointment Status: Live.

Anonymised client snapshot

An Indian defence and aerospace manufacturer, privately held, forming part of a diversified engineering group.

• Revenue in the ₹2,500–6,000 crore range from the defence and aerospace vertical, growing sharply on the back of the indigenisation cycle.
• Holds industrial licences under the Industries (Development and Regulation) Act, 1951 and, where applicable, under the Arms Act framework, covering land systems, munitions and precision-engineered sub-systems.
• Order book weighted toward Buy (Indian-IDDM) and Buy and Make (Indian) categories under DAP 2020, with a growing share from the positive indigenisation lists.
• Exports to multiple geographies across three continents, with export authorisations processed through the Department of Defence Production and DGFT.
• A technology partnership or joint venture with a European original equipment manufacturer, involving transfer of technology and associated end-use obligations.
• Facilities carrying AS9100D and NABL-accredited test capability, with DGQA/DGAQA quality assurance interface.
• A group parent that is itself listed, though this entity is not — creating material subsidiary considerations under Regulation 24 of SEBI LODR.

Why this seat, and why now

Indian defence manufacturing has moved in under a decade from a licence-constrained, offset-driven adjunct business to a capital-intensive primary business with export ambition. Boards have not uniformly caught up. Many defence manufacturers are governed by boards built for a general engineering company, with a retired officer added for access.

This mandate is the opposite. The company is seeking an independent director who understands that the governance risks in defence manufacturing are structurally different from general manufacturing: export control liability is personal and extraterritorial; agent and intermediary arrangements are a live integrity risk with contractual and criminal consequences; security classification obligations constrain what the board itself may be told; and a single integrity finding can result in debarment from MoD procurement, which is an existential rather than financial event.

Where this seat sits

Board of seven at this entity, with two group-nominated directors, the managing director, and independent directors including this appointment.

Committee expectations:

• Risk and Compliance Committee — Chair. The committee's remit is being widened around this appointment to explicitly cover export control, integrity and agent compliance, and security obligations.
• Audit Committee — Member, with a specific brief on long-term contract accounting and inter-company transactions with the group parent.
• Business Integrity Sub-Committee — Chair (a non-statutory committee reporting to the Risk and Compliance Committee).
• Participation in the group parent's material-subsidiary governance interface under Regulation 24.

Charter of the role — first twenty-four months

1. Build a real export control compliance framework. Where technology, components or design data originate from a US or European source, ITAR and EAR obligations, and the corresponding EU dual-use regime, attach to the Indian entity and to its officers. The board needs: a classification register for controlled items and technical data, deemed-export controls over foreign-national employees and visitors, an end-use and end-user certificate discipline, re-export authorisation tracking, and a documented escalation path. Personal liability under these regimes is not theoretical.
2. Own the integrity and agent question directly. DAP 2020's Pre-Contract Integrity Pact and the Standard Contract Document's provisions on agents, commissions and influence carry consequences up to debarment and contract cancellation. The board must be satisfied that: every intermediary relationship globally is registered, due-diligenced and disclosed; no commission structure could be characterised as contingent on contract award; and export-market representatives are held to the same standard as domestic ones. This applies with particular force to export geographies where local law permits arrangements Indian procurement rules do not.
3. Anti-bribery exposure beyond India. Where the company exports or partners with US- or UK-linked entities, FCPA and UK Bribery Act exposure is live. The Prevention of Corruption Act, 1988 as amended in 2018 additionally created commercial-organisation liability. The compliance programme must be adequate-procedures-grade, not policy-document-grade.
4. Contract accounting and order book quality. Long-term contract revenue recognition under Ind AS 115, cost-to-complete estimation discipline, liquidated damages exposure on delayed deliveries, performance bank guarantee encashment risk, and the distinction between a signed contract, an accepted offer and an expression of intent in the reported order book.
5. Indigenisation content verification. Indigenous Content computation under DAP 2020 determines category eligibility. Over-stated IC is a contractual and integrity exposure, not an accounting one. The Audit Committee should see the certification basis.
6. Physical and information security. Security clearance status of the facilities, classified document handling, personnel security vetting, and — critically — what the board is and is not entitled to know. Independent directors on defence boards must understand where their oversight is legitimately bounded and how to obtain assurance on matters they cannot be briefed on directly.
7. Single-customer and single-programme concentration. MoD as dominant customer creates a payment-cycle and policy-shift dependency that few other industries face. Assess the export diversification strategy honestly, not aspirationally.
8. Capacity and capital allocation. The indigenisation cycle has induced significant capex across the sector. The board should test whether ordering visibility genuinely supports the committed capacity.

Statutory eligibility — hard gates

• Full compliance with Section 149(6), tested against this entity, the listed group parent, and all group affiliates.
• IICA databank registration with proficiency test cleared or exemption available.
• No Section 164 disqualification; DIN active.
• Within Section 165 and Regulation 26 limits, accounting for group-parent interlocks.
• Indian citizenship and satisfaction of the security and vetting requirements applicable to directors of an entity holding defence industrial licences and handling classified information.
• For candidates from the armed forces, DRDO, DPSUs, Ordnance Factory successor entities or the Ministry of Defence: applicable post-retirement cooling-off and prior-sanction requirements must be fully satisfied and documented before appointment. Candidates should confirm their position at first contact. The company will not proceed with an appointment where sanction is pending or ambiguous.
• No entry on any national or multilateral denied-party, sanctions or debarment list, and no association with an entity so listed.
• No relationship with a foreign OEM, agent or intermediary that would create a conflict with the company's competitive positions or its Integrity Pact obligations.

Professional profile

Essential

• Prior defence sector experience is strongly preferred and will be weighted heavily. Qualifying backgrounds: senior armed forces service with acquisition, capability development, quality assurance or programme management exposure; DRDO or defence laboratory leadership; MoD/DDP/DGQA/DGAQA service; senior leadership at a DPSU or a private defence manufacturer; or aerospace and defence practice leadership at a major advisory firm.
• Alternatively: deep export control, trade compliance or anti-bribery compliance expertise gained in a controlled-technology industry (aerospace, nuclear, advanced electronics, specialty chemicals), even without a defence background.
• Manufacturing operations credibility. This is a factory business and the board must contain people who can walk a shop floor and read it.
• Demonstrated comfort with the specific ethical terrain of defence procurement.

Strongly preferred

• Direct experience of a defence export market — the licensing, the end-user certification and the commercial realities.
• Experience of a transfer-of-technology arrangement from the receiving side.
• Audit committee experience with long-term contract accounting.
• Understanding of the offset regime, iDEX, Make-I/Make-II and the SP model as they currently stand.

A specific note on retired officers

The sector's boards contain many distinguished retired officers. The distinguishing question we will ask is not about rank or service record — it is whether the candidate has demonstrated the ability to challenge management in a room where their own network provided the introduction. That is the actual test of independence on a defence board.

Conflict screens

Positions at competing defence manufacturers or at foreign OEMs competing for the same programmes; consultancy or advisory arrangements with MoD-facing intermediaries; any current retainer with a defence supplier; family or personal interests in the supply chain; and any pending departmental, CBI, ED or CVC proceeding.

Time commitment

Board: 5–6 per year. Risk and Compliance Committee: 4–5 as chair. Audit Committee: 4–5. Business Integrity Sub-Committee: 3–4, plus ad hoc convening on any live matter. Separate meeting of Independent Directors: 1. Facility visits: at least two per year, including one to a production line, treated as a core expectation rather than a courtesy.

Realistic total: 24–30 days per annum.

Remuneration and terms

Sitting fees at the statutory ceiling; annual commission under Section 197(1) with member approval and a committee-chair differential; D&O liability cover with express confirmation of coverage scope in relation to export control and integrity matters — candidates should satisfy themselves on this point specifically; travel at actuals.

Process

Longlist → cooling-off and sanction pre-screen where applicable → SYMPHONY™ assessment with a compliance-and-integrity module → facility visit → reference triangulation including at least one reference from a procurement counterparty context → interaction with the group parent's board → Board interview → independence and security verification → recommendation.