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Directing women

Mandating women on boards will be counterproductive

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Business Standard New Delhi
Last Updated : Jan 20 2013 | 6:57 AM IST

The clause in the Companies Bill passed by the Lok Sabha earlier this month mandating that companies of a certain category (yet to be defined) have at least one woman director on their boards is unlikely to further the cause of gender diversity in the workplace. There are two linked aspects to the issue: one practical, the other social. First, although Indian corporations in general have made great leaps forward in terms of hiring women, the proportions are not high enough to yield an adequate supply of women of the requisite qualifications to find a place on corporate boards. Indeed, at senior executive levels, their presence is so thin on the ground as to be negligible, which partly (but not wholly) explains why the boards of nearly half the Nifty companies lack even one woman director. Indeed, given the struggles both private and public companies face to fill boards with the requisite quota of independent directors – of any gender – the problem in fulfilling a quota for women will be magnified several times. Concerns that token appointments will be made have led several senior women executives to strongly oppose this move in the past.

True, several global surveys of corporations with women directors show that they tend to outperform corporations without this gender diversity, not least because they discourage stultifying group think. But the truth is that India is still light years behind countries like Norway and the Netherlands in terms of gender equality. As the protests in New Delhi last week pithily demonstrated, Indian women continue to be violently discriminated against from birth (witness India’s skewed sex ratio), in education (65.4 per cent literacy for women, compared with 82.14 per cent for men) and in the basic right to safety of their person. These are the issues that need to be addressed by legislators first and on an urgent basis instead of going for easy options like this, which will not serve the purpose.

The fact is that the winds of change are already blowing in terms of gender equality in India. The country today has women pilots, police and engineers. More women attend B-schools and their presence in companies – from banks and finance firms to IT companies – is increasingly taken for granted. Although this trend is still small, it is healthy — since it is professional women everywhere who are most in a position to demand their rights and status in society. The more the Indian state creates the opportunities for women to participate in society on equal terms as men, the easier it will be for companies to hire more qualified women, who will automatically find a place on their boards on terms far more healthy than any mandate can enforce.

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First Published: Dec 28 2012 | 12:11 AM IST

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