Nearly 60 percent of all women directors on the boards of Nifty 500 companies are independent contrary to the perception that promoters are naming women from within the family to meet the regulatory requirement, a study has found.
India is the first developing country to mandate at least one woman director on the boards of companies under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Female representation in Nifty 500 companies more than doubled to 13 percent in the five years to March, found the study conducted by Institutional Investor Advisory Services (IiAS), along with Prime Database Group and Women on Corporate Boards Mentorship Program. However, it is much lower than countries like Norway where 39 percent of board members are women, France (34 percent), the United Kingdom (23 percent) and the U.S (21 percent).
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Companies with a larger share of women in higher positions have significantly higher return on assets, said a recent study by International Monetary Fund. Replacing one man with a woman on corporate boards is associated with 8-11 basis points higher return on assets (100 basis points equals 1 percentage point), it said.
Increased visibility of women at the senior leadership will send a clear message that companies value diversity of thought and expertise – this sets the tone for advancing their overall governance agenda, the IiAS study said.
It reveals that telecom, information technology, healthcare, utilities and industrials sectors have a higher-than-average proportion of women directors, with the energy sector having just 8.9 percent of total directors as women.
Three years after SEBI deadline to adhere to the regulation, the study found 15 of the NSE 500 companies still don't have a woman director, and 11 of these are government-owned, the study said.
“You don't want a woman on the board because companies are ticking the box. You want them because, as Mao had said, woman hold up half the sky, and therefore if women are 50 percent of the workforce, there is no reason to say that they should not be 50 percent of the workforce, said Amit Tandon, co-founder, IiAS.
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