Despite crying hoarse about women rights and representation, the presence of women in Indian boardrooms continues to be dismal. A study on Women on Board 2016, conducted by global recruitment platform MyHiringClub.com and job portal JobPortal.co.in has revealed that Norway tops the list of countries with maximum women directors on boards of companies. Norway has 40.1% women directors followed by Sweden with 29.3% and Finland with 25.9%. In comparison, there are 17.4% women directors in US. India comes at a lowly 26th rank with 6.9% women directors.
Over 38,300 listed companies participated in the online study, of which 1,459 were from India. The report further observed that the average board life of male directors in India is 3 years more than their female counterparts while globally, the difference is only about 2 years.
Rajesh Kumar, CEO, MyHiringClub.com said,” Presence of women members is very low; it’s even below average percentage of developing countries. The tenure of women members on board compared to male members is a major area where India Inc needs to rethink with a positive attitude. Globally, the average tenure is 2 years for women members on board, but in India, it is only 1 year.”
It may be recalled that in India, in April, 2014, the Securities and Exchange Board of India (SEBI) had made it mandatory for all listed companies to appoint at least one woman director on their Board of Directors by 31st March, 2015. In April 2015, SEBI directed all companies which had not complied with the norm to do so by June 2015. Companies, which comply with this requirement after June 2015 are required to pay fines till the date of compliance.
This resulted in a scramble for women directors in the Indian corporate world. According to the Indian Boards Database covering 1521 NSE listed companies, there were 9,979 directors on these companies, of which 1,389 (13.9%) were women as on March 3, 2016. There are still 55 listed companies without a single woman director.
However, numbers do not tell the entire story. Women presence on company boards is increasing over the years and changing board culture in certain ways. In a recent piece in The Tribune, Rekha Sethi, board member of Sun Pharmaceutical Industries observed, “Even with just one woman present, the fraternity culture of boards has been disrupted. The consensus of the old buddies club no longer holds and issues get discussed afresh. Board meetings are now more formal, focused and open. More importantly, women have brought a different perspective to strategic issues, which have prompted boards to be more responsible and avoid costly mistakes.”
She further said, “Typically, women directors tend to be more protective about the company’s money, employees and reputation. They tend to be less supportive of betting collective interest for adventurous schemes. Being an extreme minority and practically an ‘outsider’, women directors ensure greater scrutiny of board considerations and decisions. This eventually reflects in company’s performance and soundness.”