WOMEN REPRESENTATION IN COMPANIES BOARDS

  • by IAS Score

Context: Securities and Exchange Board of India (SEBI) has released a report titled “Corporate India: Women on Boards”.

What are the key findings of the report?

a)Rise in numbers: Female representation in the board of NIFTY 500 companies has doubled from around six per cent on March 31, 2014 to 13 per cent by March 31, 2017.
b)High compliance: As on March 31, 2017, only 15 of the 500 companies did not have a woman director on the board. This shows high levels of compliance.
c)More than one woman directors: As on March 31, 2017, one hundred and seven companies have more than one woman director on their boards, with four companies having four women directors on their board.
d)Independent woman directors: 60 per cent of women directors are independent. This breaks the perception that most of the women directors appointed are from the promoter family itself so as to comply with the regulations.

What are the reasons for increase in number of women in companies’ board?

a)Firstly, the realization that having women on board not only promotes equality but also brings a different perspective to boardroom discussions.
b)Secondly, India enacted Company Act, 2013 which mandates that every Listed Company /Public Company with paid up capital of Rs 100 Crores or more / Public Company with turnover of Rs 300 Crores or more shall have at least one Woman Director.
What are the recommendations made in this report?
The report offers two suggestions.
a) First, one woman director should make way for at least one independent woman director;
b) Second, by 2020, women directors should comprise 20 per cent of board members.

Is the target achievable?

  • Yes, by having just one independent director, the number of women directors will reach to 18 per cent. From here, 20 per cent can be reached easily.
  • But the challenge is in finding the qualified women directors. In this background, FICCI has launched “Women on Corporate Boards Mentorship Program” under which qualified women are trained to take up board positions.
  • We should also have a woman director on a board’s appointment and remuneration committee to widen the pool from which directors are appointed.