The Securities and Exchange Board of India (Sebi)’s directive to listed companies for at least one woman on their board of directors has seen different responses from the top rung and the herd. A majority of listed companies have appointed family members to fulfil the directive. However, the top 200 companies listed on the BSE report a happier trend. Of these, as many as 96 already had at least one woman on their board. Another 80 companies made fresh appointments since Sebi’s directive in February last year. And, of these 80 appointments, only seven are from the promoter family. More interesting, of the 80 new appointments, 51 women are becoming a director on a board for the first time, with only five from the promoter family. Which shows these companies seem to have done a thorough exercise to seek professionals of calibre. “Large companies would usually be more conscious of their image and even if women family members are in a position to contribute on the board, perhaps they would not want that situation, and look for independent professional women directors,” says Ketan Dalal, managing partner (west) at PwC. The list of first-timers include former member of the International Finance Corporation management group, Farida Khambata, who has joined the board of Kotak Mahindra Bank.
And, business historian Gita Piramal, who has joined the board of Bajaj Auto. A study by Delhi-based financial services firm, Prime Database showed a different trend when it tracked 1,478 companies listed on the National Stock Exchange. There were 987 companies who did not have a woman director when Sebi announced its directive last year. And, 674 have complied since then — a majority of the appointments being from the promoter family. “Large companies have a greater presence of institutional investors. Hence, their corporate governance requirements are more stringent and it shows investor push in selecting valuable candidates,” says Pranav Haldia, managing director at Prime Database. However, there is also another other side of the coin, one which makes many women hesitant to join smaller companies. The new Companies Act has made the duties and liabilities of the director much more stringent. Hence, woman professionals are also more cautious in their selection, with a preference for large companies, with robust practices, for corporate governance. “From the perspective of women directors, it is understandable why they are more selective in joining companies,” says Amit Tandon, co-founder at proxy advisory firm Institutional Investor Advisory Services. “They need the comfort, especially when joining a company’s board for the first time and large, well-governed companies offer this,” he adds.