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Women On Boards: India Inc Lags In Real Gender Parity

Author: Dasari Sreenivasa Rao/Thursday, October 1, 2020/Categories: Exclusive

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Women On Boards: India Inc Lags In Real Gender Parity

Sebi directs listed cos to furnish details on women directors, employees about salaries, benefits, responsibilities, etc

When will educated women get their rightful share on corporate boards? India is the first emerging nation to have quota system for women participation on board of directors. The interesting situation is that though number of female directors is less, the holding multiple directorship positions on several boards is very high. For instance, the number of women directors is 73 for Nifty-50 holding 192 directorship positions, according to Prime Database, which has 1,944 NSE-listed companies. And the Sebi guidelines mandate it that top-500 listed companies should have one woman on the board. India made quota mandate for women on corporate boards in 2013 and reinforced it in 2019, but still doesn’t have women’s say in corporate decisions. Responding to the situation, the market regulator Securities and Exchange Board of India (Sebi) in association with Ministry of Corporate Affairs (MCA) has prepared a consultation paper on imposing norms for corporate India pertaining to women directors on the boards. Sebi is keen on not only on board of directors, but also pay-discrimination for women employees as well.

As a first step, Sebi has asked top-100 listed companies to disclose data on wages, healthcare benefits provided to women employees based on the responsibilities including skilled, semi-skilled, unskilled and differently-abled parameters in addition to representation of female directors on board. From now onwards, all the data pertaining to women employees will also be included in the Business Responsibility and Sustainability report of listed companies, which will publish it along with their annual reports.

“So far, I have not heard discussions about women welfare at board level. Perhaps, the inclusion of data about women employees in Business Responsibility and Sustainability report will definitely bring the problems of women employees to the board level. This will further pave the way to have women participation in the board of directors. Despite having well-educated women, corporate India didn’t give their due share in the decision making process,” observes a Hyderabad-based CEO.

Ficci in association with IIM-Ahmedabad carried out a study on women in corporate boards. Ficci Women sponsored the study on ‘Corporate Boards Mentorship Program.’

Elaborating on the current situation about female directors on boards, Prof Errol D’Souza, director, IIM-A, said in the report that “they (women) are younger than male directors by about eight years and retire or leave about 3.2 years earlier to male directors. Unsurprisingly, they are being paid less than their male counterparts – approximately 55 per cent less. On committees of the board, they are more likely to serve as chairpersons of human relations ones – such as Grievance and CSR and are underrepresented in Audit and Risk Management committees.” 

The Section 149 (1) under Companies Act-2013, directed every listed company (except those having paid up equity share capital not exceeding Rs10 crore and net worth not exceeding Rs25 crore) and any public company having a paid up share capital of Rs100 crore or more, or, turnover of Rs300 crore, to have at least one woman director on its board by April 1, 2015. In May 2018, Sebi mandated the top-500 companies (in terms of market capitalization) to appoint an independent woman director by April 1, 2019.

As on February 2020, as per market tracker, about 44 companies including 34 Nifty-500 companies had not adhered to the norms. The top-1,000 listed companies by market capitalization, for which the deadline was April 1, 2020, as many as 150 of them don’t have a woman independent director on their boards yet. And this lag is spread across several industry verticals right from banking/term lending to mining, mineral and metals.

This suggests the need for women to have access to forums, where they can find peer role models and have career discussions.

D’Souza further adds: “We need to recognize too that those women who do emerge as directors on boards may attract outsized attention due to their rarity in such positions. This can result in a sort of halo effect where they are glamourized and subjected to attention that is the opposite of discrimination. Scrutiny of women in business should be no more or no less than that applied to their male colleagues.”

A study based on a sample of 1,000 companies operating out of 12 countries showed that, on one hand average profitability of companies was higher by 43 per cent with diverse boards and, on the other, companies with non-diverse boards showed 29 per cent decrease in profitability. Even though gender is not the only dimension of diversity that boards lack, the need to address gender diversity is seen as most urgent because of gross under representation of women when compared to overall gender.

As of December 2019, of the total 11,251 directors, 1898 (16.9%) are women directors. Figure 2a reveals that a majority of companies (73%) listed on the NSE have appointed only the minimum regulatory requirement of one woman director. A mere 76 companies (4.3%) have appointed three or more women directors.

Disturbingly, 24 companies listed on the NSE (1.3%) – of which eight are part of the NSE 500 list – have not yet appointed even one woman director.

Only five companies have five women directors on their boards (MSTC Ltd., GIC Housing Finance Ltd., Godrej Consumer Products Ltd., Godrej Agrovet Ltd., and Apollo Hospitals Enterprise Ltd). This is even more stark when compared to companies with men directors (91% of companies have more than three men directors) and the most prevalent number of men directors in a company is five (see Figure 2b). About six per cent of NSE-listed companies have more than 10 men directors.

Among the Nifty-50 companies, 49 companies have 73 women directors occupying 192 directorship positions. Among these 73 women, Fourteen hold 5–6 directorship positions across NSE-listed companies, while seven hold seven directorship positions each.

Arun Duggal, co-founder, Ficci women on Corporate Boards Mentorship, said: “The detailed study analyses the response of corporate India to the regulatory push towards gender diversity, not only in terms of numbers, but also in terms of extent and nature of involvement of women directors on their boards. The report also outlines experiences of women directors so far – whether they have been able to enrich the boards they serve on, challenges they have faced and has the process been fulfilling vis-àvis their expectations.”

In the face of unequal representation of women in the workforce at all levels, yawning pay gap among genders, lower percentages of women in high paying and male dominated jobs, in India and the rest of the world any attempts to bridge such inequality is welcome, remarked Prof Neharika Vohra (Organisation Behavious Area) at IIM-A.

“Sebi mandated that at least one woman independent director should be appointed in the top-500 National Stock Exchange (NSE)-listed firms by April 1, 2019, and in the top-1,000 listed entities by April 1, 2020,” said Prof Vohra.

Post-mandate trends

The representation of women on boards worldwide has shown increases when it is mandated or special efforts are made to enhance the number of women on boards. Overall, the number of women directors has increased post the introduction of the mandate by the Companies Act- 2013, Section 149 (1) in 2013. A majority of NSE-listed companies (73%) have appointed the minimum mandated requirement of at least one woman director. The average number of women on boards is 1.03. About 58 per cent of the women are independent directors and 42 per cent are non-independent directors. Highly educated women are joining the boards – 51 per cent of all women directors hold a master’s degree and above and 38% hold bachelor's degrees. The study further stated that the steepest growth of 54.9 per cent in women directorship occurred between 2014 (8.2%) and 2015 (12.7%).

In the financial year 2015, an unprecedented number of women directors (497) were inducted into NSE-listed company boards. A spike in the number of same women hired on multiple boards on or near critical dates was observed, where 49 women were st hired on March 31, 2015, (the last date of the mandate) and 39 women were hired on April 1, 2019. Only 76 companies (4.3%) have appointed three or more women directors, while almost 91 per cent of the listed companies have more than three men directors. Nifty-50 companies have often hired the same women to their boards; Fourteen women hold 5–6 directorship positions across NSE-listed companies; seven women hold seven directorship positions each.

The study further revealed that of the women who served on more than one board showed 40% of the women directors received their second appointments within six months of the earlier appointment. Starkly, 15 per cent of the appointments on the next board were made in less than a month of the earlier appointment. In a 2015 report by McKinsey, it was shown that $28trillion, or 26 per cent, would be added to annual global GDP in 2025 if women participated to their full potential in the economy. However, the situation is totally different due to the coronavirus epidemic. But the industry experts opine that women make wise decisions when they face challenging situations. About 40 per cent of the women directors received their second appointments within six months of the first one. Even worse, 15 per cent of the second appointments took place in less than a month after the first one.

Based on classification provided by the Prime Database, the status and number of women on multiple boards and their professional and family connection were tallied. Only one third of women hired in less than one month were family members. While the belief that organizations would simply hire Known women to fill the mandate was not supported, the incidence of women being hired to multiple boards Based on personal connections was significant.

Hiring Process

There is likelihood that women are being appointed through the existing networks of the board members themselves. Such reliance on networks limits the search for unique women. To test this, in Ficci-IIM-A survey survey, women, who served as directors how they had been appointed to the boards, indicated that they were primarily hired from their professional networks. Among the 192 survey respondents, more than 50 per cent mentioned that their board appointments came from their professional networks. Nomination from promoters, investors, or government authority was the next common source. The least likely mode of appointment was via search agencies or participation in training and mentorship programmes designed for women to prepare them for board positions


The survey revealed that more than 50 per cent of the respondents experienced onerous regulatory pressure and heavy liabilities in their roles. Several women directors also mentioned that it seemed more onerous because they had little immunity and very few ways to protect themselves from the associated risk. The Ficci report further elaborated another challenge that was commonly shared by the women director respondents was the difficulty in overseeing the firm’s operational matters. This included specifics such as limited access to the firm’s operational data in board meetings, and limited time available to review and comment on operational issues, and, at times, the rather short duration of the meetings.

What Needs To Be Done

The primary research conducted by Ficci-IIM (A) on 192 survey respondents, it made select recommendations towards building diversity and reaping its full potential. The women directors through the survey have indicated that there is a clear need gap felt by women board members in getting industry exposure and opportunities to create an on-ground impact. While the women appreciate how board memberships boost their network, personal learning, and the broadening of their perspectives, the key areas of concern such as a board director’s overbearing liabilities, limited transparency in organization’s dealings and decisions, and lack of inclusive climate continue to persist.

The writer is a business journalist with 27 years of experience


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