Boardroom Diversity: Nifty 500 Companies Have 18% Women Directors, Says Study

Public sector units fare poorly among Nifty 500 companies, with only 13.5% of directorships held by women, says the study.

<div class="paragraphs"><p>(Source: <a href="">Jason Goodman</a>/Unsplash)</p></div>
(Source: Jason Goodman/Unsplash)

Boardroom diversity in India is improving—albeit at a slower pace—as the momentum of new appointments has faltered in the last three years.

Among the Nifty 500 companies, women held nearly 18% of directorships as of March 2022, according to a study conducted by Institutional Investor Advisory Services, along with the Netherlands' pension provider, APG.

Although the number of women directors is increasing, the pace of new appointments has faltered, with an aggregate 1% increase over the last three years, as highlighted in the study, titled Corporate India: Women on Boards.

"Based on these current rates, it will take India until 2058 to achieve 30% gender diversity on boards," it said.

Women chaired the boards of 22 Nifty 500 companies, as of March 2022, compared to only 18 in March 2020. Of the 22 women board chairs, 12 are promoters or promoter/family representatives, and 10 are professionals, according to the study.

At a global level, boardroom diversity continues to improve, with an average of almost 24% female representation in corporate boardrooms.

Europe and North America are above the global average, with women making up 34.4% and 28.6% of company boards, respectively. Country-wise, France leads the pack with 44.5% female representation on boards in 2021.

In all, 48.6% of the Nifty 500 companies had two or more women directors on their boards, as on March 31, 2022, as against 45% at the end of fiscal 2021.

Public sector units fare poorly among Nifty 500 companies, with only 13.5% of directorships held by women. Of the 69 PSUs in the Nifty 500 index, only 19 had 20% or more female representation on their boards.

"While a handful of PSUs have women as the chairperson and managing director, in the aggregate, PSUs need to deliver better on gender diversity as custodians of government investment in India Inc.," the study said.

Efforts need to be made through disruptive talent management initiatives in addition to the improvements already made in retention, maternity benefits, safety and security at the workplace for women in PSUs, according to the study.

The Way Ahead

Here are some suggestions given in the study:

  • Regulators have set the agenda; investors and companies now need to push to achieve it.

  • Companies need to invest in building a strong female talent pipeline.

  • Companies need to address how their corporate culture supports women and accepts them in leadership positions.

  • Global activism around ESG can benefit gender diversity.

  • Cultural blocks, gender pay gaps need to be addressed.