Only one woman for every eight on India Inc payroll: CFA study

Women’s participation rate in finance and related fields continues to lag in India, the average count being only one woman for every eight people on the payroll, according to a sample study of 134 companies by CFA Institute and CFA Society India.

The global not-for-profit association of investment professionals looked at disclosures made by 134 listed firms in their Business Responsibility and Sustainability Report (BRSR) for 2021-22 (FY22).

The BRSR framework is a set of sustainability disclosures mandated  by the Securities and Exchange Board of India (Sebi) in 2021 and Indian companies were asked to report topics such as workforce composition, pay, attrition, and other factors, split by gender. The disclosures are voluntary for FY22 and mandatory for the top 1,000 companies from 2022-23.

The study found that women's career progression in sectors with large workforces and participation rates, such as information technology and financial services, were low, compared to other sectors.

For instance, in the case of financial services companies, women represented 21.7 per cent of employees and 15.9 per cent of key management personnel.

In FY22, the average ratio of median remuneration of women to men was 0.97, suggesting gender pay parity. However, the median remuneration ratio of women to men drops to 0.52 for key management personnel and to 0.64 for directors, reveals the study titled Mind the Gender Gap by CFA Institute.

The issue also assumes significance as Sebi has proposed a new environmental, social, and governance rating framework, placing greater emphasis on comprehensive social standards, such as gender diversity and the percentage of gross wages paid to women by companies.

“Women in India face various additional barriers to their careers. And measuring various gender-related parameters in the workplace is a great start to understanding the issues, as the annual reports will provide rich time-series data,” said Rajendra Kalur, chairperson, CFA Society India. 

To boost women’s participation and narrow the pay gap, the CFA Institute has recommended companies improve their disclosures, particularly related to median remuneration, to provide additional perspectives on participation, career progression, and potential gaps in income.

“There is a pressing need to improve diversity within senior management and key management personnel, and companies are encouraged to provide qualitative disclosures on how they are working towards improving career progression for women,” it further said.

Currently, the capital markets regulator mandates all listed companies to have at least one woman independent director on their boards. Yet, several companies, mainly public sector undertakings (PSUs), haven’t met this requirement.

In the past, India Inc has cited reasons such as the non-availability of eligible and qualified women for the limited presence of women directors on its boards.

In the case of PSUs, the lack of representation of women on their boards is blamed on the government-appointment process.

Just How Thin Is The Glass Ceiling

Findings

Average female participation rate across companies was 12.7%

Median remuneration ratio of women to men dropped to 0.52 for key management personnel and to 0.64 for directors

69% of companies had no women among their key management personnel

Women had higher turnover than men (18.3% versus 16.1% for men)

Recommendations

Firms must improve disclosures, particularly related to median remuneration

Beyond board diversity, there is a pressing need to improve diversity within senior management

Beyond mentorship, sponsorship is also needed to ensure career progression

There is a need to track gender diversity in talent acquisition and talent development pipelines