#dnaEdit: Mind the gender gap

At its board meeting of February 13, 2014, the Securities and Exchange Board of India (SEBI) suggested there should be at least one woman director on every board. Interestingly, majority of companies have not complied with this SEBI directive. The earlier SEBI deadline — October 1, 2014 — had to be extended to March 31, 2015. The irony is that SEBI itself has not complied with its own directive. There is no woman on the SEBI Board of Governors.
Spanning a large social context, the issue of having a woman director on company boards is of critical importance. One can reasonably argue that the need for SEBI to issue fiats to companies in itself reflects the skewed gender roles within these organisation hierarchies. In other words, the existing company directors should have on their own volition removed the glass ceiling and promoted talented professional women to top posts in their organisations.

The utilitarian argument supporting the inclusion of women on company boards is stronger than the altruistic argument often touted in support of gender equality. The utilitarian perspective gives due importance to the value that talented women bring to the table, and it rejects the notion of a formal and ritual nod to a social ideal; in this case doing away with the glass ceiling that exists in majority of professional organisations. There are two aspects to the utilitarian view. The first is that of gender neutrality. If there are professionally qualified women and there are men with no matching talents, then it would be foolish indeed to keep the women out because the norm so far has been to promote boards which are virtually exclusively male clubs. The managerial skills and business judgments of women and men are the same, and therefore to keep women either out of habitual gender based prejudice or biased policy is surely not in the interest of the company itself. The second aspect is that of board room diversity. There is a common sense perception, which is almost intuitive, that there is a qualitative difference when men and women in a committee put their heads together than when there are only men or only women in it. Women do bring a different perspective which adds value because there is an increase in numbers of women in the workforce and among the consumers. And the presence of women in the board room will also represent the women outside of it. Corporate governance would be much improved if women are present in the top decision-making body.

It is necessary to question the formalistic and minimalistic SEBI proposal that there should be at least one woman among the board of governors. The complying companies could well settle with a ritualistic representation of having one woman on directors’ board. That — clearly — is not what the regulatory body is aiming for. The selection should be based on the competence of the person. If there are more women with the required experience and competence, then why not allow them to dominate the board? Of course, for the sake diversity, there should be room for a couple of men on the board. Where men are in a clear majority, the diversity condition should be complied with by bringing in more than a single woman. But these are decisions that should be taken by the companies and by the people who run them. These are issues that cannot be settled through an administrative fiat.

Captains of industry and business should bring in more women into the board rooms in their own self-enlightened interest. If they do not, they could be falling behind the business curve.