60 firms need to appoint women directors

At least 60 companies need to appoint women directors on their boards. By the Companies Act of 2013, all listed entities need to have at least one woman in their board room. The Securities and Exchange Board of India (Sebi) had set a deadline of April 2015 for India Inc to meet this requirement.

From data provided by Prime Database, 25 companies have not appointed a woman as director despite 18 months since the deadline ended. Public sector majors Oil and Natural Gas Corporation, Bharat Petroleum and GAIL are among these, all with market capitalisation in excess of ~50,000 crore.

Another 36 companies have had women as directors but not at present. These include private sector names such as Adani Enterprises and Videocon Industries.

Recently, Sebi chief U K Sinha urged companies to comply with the requirement. "Most of corporate India has happily introduced it. Those who have not done so, I would exert them to do so as early as possible," he had said at a conference organised by business chamber Ficci.

The regulator has also written to the finance ministry to appoint a woman as director on its own board. "The Sebi Act does not prescribe it but as a good measure we have asked the government to do it," Sinha added.

Experts say Sebi should act against those flouting the rules. "It is been nearly two years that companies are still defending themselves on this front. Unless Sebi takes strict action, they won't take it seriously," said Shriram Subramanian, managing director, InGovern Reasearch Services, a proxy advisory firm.

Interestingly, the stock price analysis of companies that currently don't have a woman director shows most of them have underperformed the market this year. The average returns for 61 companies without a woman director this year is a negative six per cent, as against a nearly 10 per cent gain on the benchmark indices.

The data supports a recent analysis done by Credit Suisse Research Institute (CS). In its bi-annual 'CS Gender 3000' report, it had said "companies with a higher participation of women in decision-making roles continue to generate higher market returns and superior profits".

Adding: "The number of women on boards in India doubled over the past six years, from 5.5 per cent in 2010 to 11.2 per cent in 2015, closing the gap with the global average of 14.7 per cent. However, India saw a slight decline in management diversity, from 7.8 per cent in 2014 to 7.2 per cent. India is the second lowest in the region in terms of female representation at a senior management level, behind Japan and South Korea (both at 2.3 per cent)."