Every Fifth Board Member in Indian Companies is a Woman
Ten years ago, the Companies Act 2013 made it necessary for companies to have at least one woman on their board of directors. Now, in Nifty-500 companies, which are some of India’s biggest, one out of every five board members is a woman. Five years ago, it was only one out of every eight board members, and ten years ago, it was just one out of every twenty, according to research by Prime Database.
So, there’s been progress in having more women on company boards, but there’s still work to do. The law made sure that nearly all 500 companies have at least one woman on their board. However, according to a report in The Economic Times, for 45% of these companies, that’s all they have—just one woman, as required by law.
And the bigger the board (the more people on it), the less likely it is to have more women. For example, 81 companies with ten or more board members only have one woman on their board. L&T, which has 19 board members, is one such company. But it’s interesting that L&T’s only woman director is Preetha Reddy, who is also the vice chairperson of Apollo Hospitals. Apollo Hospitals is one of only eight companies where women make up at least half of the board members.
Manju Agarwal, an independent woman director on the boards of several listed companies, said, “Company management hires independent directors, the people with whom they have some earlier interactions, which gives them comfort, or the government officials post their retirement. Since most of these people tend to be male officers or entrepreneurs, the boards end up having more male members. And typically, one woman director gets hired predominantly because of the legal mandate”.
Sutapa Banerjee, who is an independent woman director on the boards of several Indian companies, stated, “One in five is not a great number at all. 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 roles meticulously. Once they become directors on one board, it is a matter of time before they get more such opportunities.”
In S&P 500 companies, one out of every three board members is a woman. This isn’t because of a law; it’s because investors wanted it, and companies worked to make their boards more diverse by including women.