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Women directors: The glass ceiling in India Inc

Last year, the Securities and Exchange Board of India (SEBI) asked companies listed on the Indian stock markets to have at least one woman on their board of directors. The deadline for this exercise was October 1, 2014 and was extended to April 1, 2015 as India Inc failed to find 966 woment to fill the seats and be in tandem with the new Companies Act 2013. 

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Christine Lagarde, chief of International Monetary Fund (IMF), is currently in India and during an interaction with college students in New Delhi said that companies with women on boards do far better. India Inc somehow fails to see this. 

Last week, Securities and Exchange Board of India (SEBI) warned that there will not be anymore extensions and strict action will be taken against companies who do not appoint at least one woman on its board by the end of March 31, 2015. As per SEBI, nearly one-third of the top-500 listed firms in India do not have any woman member on their Boards yet. 

Last year, SEBI had asked companies listed on the Indian stock markets to have at least one woman on their board of directors. The deadline for this exercise was October 1, 2014 and was extended to April 1, 2015 as India Inc failed to find 966 woment to fill the seats and be in tandem with the new Companies Act 2013. 

Corporate India, however, remains unfazed and still continues to drag its feet on the matter. 

Pranav Haldea, managing director of PRIME Database, had told Business Standard in an interview last year, “In a six and a half months since the Sebi board meeting on February 13, when this stipulation was announced, till August 31, 264 women have been appointed to 274 directorship positions in 264 companies. Of these companies, 20 already had women on their boards before the Sebi guideline was announced, implying since then, 244 companies have complied with the requirement.” To put this number in perspective, there are nearly 1500 companies listed on the National Stock Exchange. 

As per a mid-2014 report titled 'Women on Boards: a Policy, Process and Implementation Roadmap' by Khaitan & Co in association with Biz Divas, a national network of professional women only 4% of the total number of Independent directors on Board were women.

Although, India is the first among developing countries to have made such a norm mandatory, it is the private sector that is being an abysmally poor implementer of a norm that should have been adhered to without being forced upon companies in the form of a law. 

Finding nearly 1000, women to have at least one chair on the board of directors in companies is proving to be such a difficult task for Indian companies that out of the 242 women directors appointed last year, at least 45 seats were filled by women belonging to the promoter group companies, Haldea had added. 

This effectively means that Corporate India is more interested in meeting the norm than being an actual driver of change and diversity. 

Internationally too the situation isn't much different. Corporate Women Directors International (CWDI) Report, dated July 2014 said, "Overall, the numbers (women directors on companies' boards) have only begun to move upward as more countries have begun to effect quota laws and as some others begin to understand that good governance requires gender diversity on boards." 

The road continues to be uphill as between 2004 to 2014, percentage of women board directors of the Fortune Global 200 was 10.4%. as against 17.3% in 2014. "The 10-year change in percentage of women board directors averages less than 1% per year – a glacial rate that moved some countries to take action," CWDI said. 

In 2004, Italy was at the lowest spot in the table with a mere 1.8% women's representation on board seats in its companies. However, this dramatically changed and in 2014 it surpassed the US with 25.8% board seats occupied by women in companies that CWDI covered in its study. 

This change was largely due to the quota law passed by Italy in 2011. 

The report further said, "Countries with quotas for women directors continue to outperform those without such initiatives, fueling the overall increases in percentage of women directors. In 2014, the Fortune Global 200 companies based in countries with quotas had a higher percentage of women on boards (24.3%) than companies in countries without a quota (15.6%)." 

Clearly, the glass ceiling exists and India had a chance to change that but for India Inc squandering it away seems a better option at the moment. 

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