Women directors on Indian boards represent the half-full-half-empty quandary

The country is progressing on the path of achieving gender representation in India Inc, with a search of board members of big companies in the country throwing up the fact after a decade of the Companies Act 2013 coming into force, on average one in every five board members – or 20% — in Nifty-500 companies is a woman. The legislation stipulated that at least one out of 10 on the boards should be a woman. The search was carried out by Prime Database, The Economic Times reported.

In 2018, or midway through the time period, one in every eight directors was a woman. 10 years ago, when the legislation came into effect, the average ratio was one in 20 members or 5%.

To be sure, there is a long way to go.

The legislative fiat has ensured that almost all the 500 companies have a woman director on their boards. But in total, 223 – or about 45% of the Nifty-500 companies – have only one woman director just to stay clear of non-compliance.

Ironically, the bigger the size of the boardroom, the more striking the dearth of women members. There are as many as 81 companies with only one woman director on their boards that comprises 10 members or more. One of the companies in this category is the venerated L&T.
This EPC specialist has as many as 19 members on its board but out of them only one is a woman. At the other extreme is Apollo Hospitals that has more woman members on its board than males. It has got 11 directors out of which six are females. And the only woman director on the L&T board is Preetha Reddy, the vice chairperson of Apollo Hospitals.
Apollo Hospitals is one of the just eight companies of the league of companies where women constitute a higher share of the board than men.

“Company managements hire independent directors, the people with whom they have some earlier interactions which gives them comfort, or the government officials post their retirement. Since most of these people tend to be male officers/entrepreneurs, the boards end up having more male members. And typically, one woman director gets hired predominantly because of the legal mandate,” remarked Manju Agarwal, an independent woman director on boards of several listed companies.
Some are certainly not happy even with the “first benchers” and think there is room for further improvement. “One in five is not a great number at all. This will hasten the pace of change as there is a reasonable pool of qualified women who take up directorships seriously and perform their role meticulously. Once they become a director on one board, it is a matter of time before they get more such opportunities,” said Sutapa Banerjee, who is an independent woman director on boards of several Indian companies.

In the developed economies, to be sure women enjoy a higher share on the boards. Roughly 33% of the directors on boards of S&P 500 companies are women. However, it has happened due to investor pressure and not on account of legislative compliances.