Women directors in Nifty50 companies see pay double, outpacing male peers

In 2024, women directors held 22% of board positions in Nifty50 companies, up from 18% in 2019, said the study

The remuneration for women independent directors in Nifty50 companies has seen a significant rise, doubling over the past five financial years, compared to a 1.7-times increase for their male counterparts, according to a Deloitte study reported by Live Mint.

The study, titled ‘Independent Director Remuneration in India – Beyond the Headlines’, reveals that boardroom compensation for women directors is evolving, reflecting their increased responsibilities and growing influence in the corporate sector.

Overall, the remuneration for independent directors across various sectors grew at a compound annual growth rate (CAGR) of 11 per cent between FY19 and FY24. Companies in heavy manufacturing and information technology sectors led in offering higher compensation, influenced by their scale, international operations, and the presence of foreign directors.

 

Board fees on the rise

Looking forward, search firms expect continued growth in fees due to the rising involvement of independent directors in various board committees. An independent director’s remuneration generally includes sitting fees for board meetings and commissions tied to company performance. While commissions are expected to increase, sitting fees are capped at Rs 100,000 per meeting by the Companies Act, with variations depending on whether the meeting is a standard board session or a specialised committee meeting, such as those for audit, nomination, or remuneration.

“The demand for experienced and highly skilled independent directors is increasing as Nifty50 companies continue to grow,” said Dinkar Pawan, a director at Deloitte specialising in executive performance and rewards, in an interview with Live Mint.

He also noted that independent directors often serve on boards across different sub-sectors, which has led to a levelling of pay over time.

Rise of women directors
 

The study also highlights the significant increase in remuneration for women independent directors, driven by their expanding roles. In 2019, female independent directors typically served on two committees on average, compared to three for their male counterparts. By FY24, the average for women had increased to three committees, contributing to their rapid compensation growth.

In 2024, women directors held 22 per cent of board positions in Nifty50 companies, up from 18 per cent in 2019. This increase in representation has helped narrow the pay gap between male and female directors, as noted in the Deloitte study.
 

However, the study also raises concerns about the true independence of women directors.
 

“A large number of companies retain women independent directors because a minimum number on board is now mandated for certain types of companies in India,” said Aparna Mittal, founder of the Samana Centre for Gender, Policy and Law.

She added that for many companies, this requirement remains a checkbox exercise. Mittal emphasised the need to assess whether women directors are genuinely independent or if their input is actively considered in significant decision-making processes.

Rising demand for directors
 

The demand for independent directors has surged in the past year, with search firms reporting a significant increase. “In the past nine months, we have worked on over two dozen searches for independent directors, which is at least 50 per cent more than the previous year,” said Navnit Singh, chairman and managing director of business consulting and services firm Korn Ferry India. This reflects the growing urgency within Indian companies, as over 2,000 independent directors are set to complete their tenures by FY24, leading to a scramble for suitable replacements.

Despite the increase in qualified candidates, finding the right fit remains challenging. “Many CXOs are now pursuing certification programmes to qualify as directors, but companies are looking for individuals who can enhance their brand image,” explained Pranshu Upadhyay, regional director and India head for technology hiring at Michael Page.

He further noted that there is a strong preference for women candidates to fill these roles.