Dear India Inc., Why Are Women Missing From Corporate Boards?
Experts say some companies are happy to pay fines rather than actually include women on their boards.
The percentage of women board members in India according to the Seventh Edition of Deloitte Global Women in the Boardroom Report, 2021 is just 17.1%. Globally, this statistic stands at 19.7%, which remains abysmally low.
Dear India Inc., what happens that by the time we reach leadership and decision-making positions, women vanish from the rooms that matter?
According to a study by Prime Database, there are 2,350 female and 10,356 male board directors in India’s listed companies.
In India, the percentage of women board directors has shot up by nearly 10% since 2014.
But, how did we achieve this incredible feat? In 2013, the government brought about amendments to the Companies Act that made it mandatory for listed companies to have at least one woman board director.
While this was an important move, the Deloitte Global report specifically points out that this progress is at a snail’s pace and if this rate of change were to continue every two years, we could expect to reach a level approaching parity only in 2045.
The bigger question is, did this Act bring about real change in perception? Or did we once again get caught in the trap of tokenism? Experts we spoke with say some companies are happy to pay fines rather than actually include women on their boards. And when it becomes a compliance and an image issue, they will begin the process of finding that one woman candidate.
There are definitely a few companies in India that are not just following the law but are genuinely inviting women to be part of the board of directors. Statistically, out of top 500 companies on NSE, 47% have more than one woman director, but the other over 50% have only one woman independent director.
Several companies look for women from within their family and friend circles to fill up board positions, but do they have any genuine say in the affairs? More often than not, they get a seat on the table, but no voice. Many are unaware of their legal liabilities and don’t realise they are equally liable if the company is caught in criminal activities.
While women have made it to board positions, thanks to that push by the Companies Act, 2013, are they actually getting the same salary as their male counterparts?
Let me quote some numbers coming from the U.K. and then you can take a guess for India. According to a study cited in The Guardian report, female directors in blue chip companies are paid 73% less than their male counterparts.
Seat On The Table, But Is Their Voice Heard?
Many women on boards complain that they don't get their voices heard, and are often told to ‘Just sign the document’, or ‘Why do you have to think so much?’ or the classic, ‘This is what the majority wants’—the majority being men.
The Companies Act may well have nudged the door open for women directors, but are enough women getting the opportunity to join these important rooms?
Let’s hear it from the Finance Minister Nirmala Sitharaman herself. At an event in September 2022, she said:
“The Nifty50 companies have often hired the same women to their boards. About 14 women hold 5-6 directorship positions across NSE-listed companies, while seven women hold seven directorship positions each. It is a very revealing number; it doesn’t have to be so concentrated. These numbers are getting noticed by the Ministry of Corporate Affairs.”
The counterargument often brought out to this charge is, ‘But where are the qualified women who are ready to take on the responsibility of board positions?’
The Indian Institute of Corporate Affairs, a part of the Ministry of Corporate Affairs, manages a data bank of available board directors—the current number of women registered in this data bank as of today is over 6,000.
More importantly, if we don’t create a path for women to grow from middle management to leadership roles, how will they find a place in corporate boardrooms?
Here’s some advice for women on boards—know your rights, be an independent thinker, raise and register your opinion, be more involved, and force a change.
The ones in leadership position—mentor young talent, promote women to senior positions, and create a larger pool of talent that can then take on board positions.
Mugdha Kalra is a journalist with over 20 years of experience. She is a renowned inclusivity expert and was chosen as one of BBC100Women, 2021.
The views expressed here are those of the author, and do not necessarily represent the views of BQ Prime or its editorial team.