Sebi's decision to impose penalty, "though small", on companies without women directors is a good first step but the regulator could also seek explanation from the government on non-compliance by public sector firms, according to proxy advisory firm IiAS.
The Securities and Exchange Board of India (Sebi) on Wednesday announced a four-stage penalty structure wherein fines increase with the passage of time on listed companies that failed to appoint at least one woman director within the stipulated deadline of March 31.
"Having announced regulations, to not have acted on non-compliance, would have sent the wrong message. The penalty - though small, shows Sebi means business," IiAS Managing Director Amit Tandon told PTI.
Many private as well as public sector companies did not comply with the woman director norms.
While noting that Sebi action is a good first step, Tandon said that public sector companies should have taken the lead in appointing at least one woman director but they are laggards.
"Sebi's decision to penalise non-compliant companies is also a rap on the knuckles for public sector entities.
"Since the public sector companies do not appear to be completely autonomous, maybe the concerned administrative ministries should be asked to explain," he said.
The capital market regulator has announced a minimum Rs 50,000 fine on companies and warned of further action, including against promoters and directors, for non-compliance beyond September.
