The issue of diversity on corporate boards (particularly gender diversity) has garnered much importance lately, including in academic studies. The Harvard Corporate Governance Blog cites to a GMI Ratings’ survey that measures board representation by women in 45 countries across the globe.
The survey reports heterogeneity in trends both among developed markets and emerging markets as distinct groups, and also among individual countries. The survey finds that developed markets as a group fare better than emerging markets as a group in the appointment of women directors on to corporate boards.
As far as India is concerned, the report finds that “[d]espite the presence of a few high-profile female entrepreneurs and CEO’s, India’s percentage of female directors is only 5.2%, below the developing-world percentage of 7.2%, and it has not increased significantly since 2009.” India has not fared well on other measures of gender diversity either when compared with other developing economies.
Several countries are addressing the issue of diversity through specifically legislating for it. Even the Companies Bill, 2011 in clause 149 provides power to the Central Government to prescribe rules for providing minimal women’s representation on corporate boards in certain classes of companies. Although mandating board diversity through law may have its own share of issues to contend with, the norms and practices followed by boards and their nomination committees may set out criteria for ensuring diversity on their boards.