After 10 years of the enforcement of Companies Act 2013 that made it mandatory for companies to have at least one woman director on their boards, one in every five board members on average in Nifty-500 companies is a woman.
Five years ago, one in eight directors was a woman, and ten years ago, the proportion was one among twenty members, Prime Database research showed.
Though there is progress made in enhancing gender equity at the board level, the glass is both half full and half empty. The legal mandate has ensured that almost all the 500 companies have a woman director on their boards, but it has also defined the presence of women on Indian boards. In total, 223 (or 45%) of the Nifty-500 companies have only one woman director, in compliance with the law.
Furthermore, the bigger the size of the board, the more conspicuous is the dearth of women directors. There are 81 companies with only one woman director on their respective boards of ten or more members. For instance, L&T with a board size of 19 members has only one woman director. Ironically, the only woman director on the board of L&T is Preetha Reddy, the vice chairperson of Apollo Hospitals that has six women directors on its board of 11 members. Apollo Hospitals is one of the eight companies of the '50%+ club' where women make up half or more of the board.
"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" said Manju Agarwal, an independent woman director on boards of several listed companies. "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", she added.
"One in five is not a great number at all," said Sutapa Banerjee, who is an independent woman director on boards of several Indian companies. "It will need more affirmative action since most people on the boards today are still men who are old. 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."
Globally, one in three directors on the boards of S&P 500 companies is a woman. But this is not due to law mandating women on board but on the back of pressure from investors and efforts by the companies towards having gender diversity at the board level.
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