Gender Diversity on Corporate Boards in India

The NSE Centre for Excellence in
Corporate Governance (CECG) has issued its most recent quarterly briefing
titled “Gender
Diversity on Boards
”, which has been authored by N. Balasubramanian and
Nirmal Mohanty. The executive summary is as follows:
• Having women on
corporate boards is a diversity measure justified on the basis of both social
equity and business consideration;
• Global
experience indicates that progress in the implementation of gender diversity is
typically tardy unless mandated by law;
• European
countries in general and Scandinavian countries in particular have progressed
significantly in this field, with Norway heading the world with 35.5%
representation of women on their boards;
• Effective 1
April, 2015, listed companies in India (with some limited exceptions) were
required to have at least one woman director on their boards; close to 88% of
the companies reportedly have complied.
• A large number
of listed companies in India seem to have appointed women directors in response
to the recent SEBI mandate; not surprisingly, most Indian listed companies have
only one woman director, although studies have shown that companies with three
or more women directors have outperformed those that have had less.
• Aside from
absence of critical mass of women directors, a number of other issues have
emerged; namely, independence of women directors appointed, paucity of
potential independent woman directors and women directors’ own perception.
• Capacity
building, supportive boards and legislative action are essential for successful
progress in this field.

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.

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