Thanks to Corporate Affairs Minister Murli Deora and his tribute to Indian women on the occasion of the International Women’s Day on March 8, company boards may soon turn more gender-friendly.
Deora announced his plans to reserve one director seat for women for all companies that have five or more directors on their board.
While the minister hoped his decision would give women their rightful due in the corporate world, several thousand companies are wondering if they would have to begin their search for suitable female candidates before Deora mandates his proposal.
The Ministry of Corporate Affairs has decided to include this provision in the proposed Companies Bill, likely to be tabled in the current session of Parliament.
The industry response to the minister’s announcement has so far been mixed. While there was unanimity on the need to have more representation of women on boards, many felt it should not be made mandatory at the moment.
“It should be a guideline rather than a law. Being a director is quite an onerous job. You need to have the expertise,” Swati Piramal, 
director (strategic alliances and communication), Piramal Healthcare, said. According to her, to begin with, it should be of a recommendatory nature.
P K Rustagi, co-chairman of the corporate affairs committee of the PHD Chamber of Commerce and Industry, said changes were necessary in the fitness of the changing business. “Board of companies should have adequate composition of promoters, independent directors, women directors, etc, to provide objectivity and right perspective to board decisions. But this should be of advisory nature,” Rustagi said.
It is not that industry was caught unawares. The trigger for the minister’s announcement seems to be a report prepared by the Associated Chambers of Commerce and Industry of India (Assocham).
Titled ‘Corporate Women: Close the gender gap and dream big’, the report suggested women comprised barely 5 per cent of the boards of India’s top-100 companies, as listed by the Bombay Stock Exchange (BSE-100).
It stated, of a total of 1,112 directors on the boards of BSE-100 companies, only 59 were women. The study argued the 5.3 per cent representation of women was much lower compared to that in countries like Canada (15.0 per cent), the US (14.5 per cent), the UK (12.2 per cent), Hong Kong (8.9 per cent) and Australia (8.3 per cent).
The findings reveal that 12 companies on the BSE-100 have more than one female director, seven have female executive directors and 2.5 per cent of all executive director roles are held by women.
“We hope this research will act as a catalyst for discussion in and among corporate India on the need for greater gender diversity at senior levels,” said Shalini Mahtani, co-author of the report and founder of Community Business.
According to the report, JSW Steel Ltd tops the list, with three women (23.1 per cent) on its board of 13. Oracle Financial Services Software Ltd is the second, with two women (22.2 per cent) on its board of nine; and Piramal Healthcare Ltd the third, with 20 per cent female board directors. Both of Piramal Healthcare Ltd’s female directors hold executive directorships and it is the only BSE-100 company with two executive female directors, the report claims.
Axis Bank Ltd, with two women on its 11-member board; and Lupin and Titan Industries, with two women each on their 12-member boards, were also mentioned.
The Standing Conference of Public Enterprises (SCOPE), which represents over 250 central public sector entities (CPSUs), also felt the need to strengthen the presence of women on company boards.
“The presence of women board members as independent directors should be welcomed. However, it should not be at the cost of quality. Being a woman cannot be the sole criteria for selection. Woman candidates with domain expertise, who can carry out the responsibilities of the board, should be selected,” SCOPE Director-General U D Choubey said.
CPSUs employ 110,000 women, though a majority of them are in mid-level positions.
Murli Deora feels the move is in tune with the larger attempts of his government to give women a rightful place in the society.
