Women in boardroom: Still small in number but a growing presence

Contrary to popular perception, 60 per cent of women directors on the board of Indian companies are truly independent and do not belong to the promoters’ families, a study by proxy advisory firm IIAS reveals. In general, there is a greater participation by women in the boardroom; female representation in the NIFTY 500, which was 5 per cent in March 2012, has increased to 13 per cent in March 2017.

Also, what is very encouraging is that while a good many women directors may belong to the promoter family, at least half of them are playing an executive role and driving the company’s business. In other words, they are professionals in their own right and are capable of running the operations. While these companies have been fortunate in having women who are competent to shape their fortunes, India Inc, nevertheless, has very few women in leadership positions.

That’s despite the fact there are large pools of talent across sectors. At 13 per cent, moreover, the study finds, India is behind countries such as Norway (39 per cent), France (34 per cent), the UK (23 per cent) and the US (21 per cent). The Companies Act, 2013, first codified the mandatory requirement of at least one women director; the Act was effective from 1 April 2014.

To be sure, the law is having the desired effect and Indian boards are now far more inclusive. Of the total 4,690 directors on the boards of Nifty 500 firms, women constitute around 13 per cent (622). While there were a total of 477 unique women directors in these companies as on 31 March, 2017, 15 companies in the study did not have a woman director, many of them from the public sector, where the appointment process has been delayed for one reason or another.

In widely-held companies, where there is no discernible promoter or promoter entity, the proportion of women directors is the highest at 14.3 per cent. This is not surprising considering that the majority of these companies are from the financial services sector, where there is high institutional ownership.

Once again, public sector units (PSUs) trail with only 11.9 per cent female representation. A large majority of companies (485) are compliant with the regulatory thresholds. Of these, 107 companies have exceeded the quota of one woman director on board and four companies (UltraTech Cement, Cipla, Apollo Hospitals Enterprise and Idea Cellular) had four women directors on their board.