Half of Nifty firms do not have a woman director

New bill prescribes at least one woman director finding eligible candidates might be a challenge

Even as the whole country is debating ways to make life better for women, corporate India has got an opportunity in the form of the new companies bill to do its bit for empowerment of women. The bill passed in Lok Sabha last week and expected to be passed in the Rajya Sabha, early next year makes it mandatory for certain companies to have women directors.

Once the bill becomes law, the number of women in corporate boards is likely to increase dramatically, feel experts. At present, the number is abysmally low at around 5 per cent. According to BSE database, of the 16,872 directors on board of some 2,865 companies only 928 or 5.5 per cent were women. 

 

Even among the larger companies, the number of women at board level is minimal. At least 24 of the fifty top listed firms that form the Nifty index do not have a single woman director, according to an analysis of board composition of top firms by Stakeholders Empowerment Services (SES).

Some of the top firms without a women in board include Reliance Industries, ITC, Reliance nfrastructure, Tata Motors, Tata Power and Larsen & Toubro. IT Majors TCS and Wipro also have an all-men board.  Public sector companies did better with Punjab National Bank, Bank of Baroda, BHEL, Powergrid, ONGC, GAIL and Coal India having women directors. SBI, NTPC and SAIL are the Nifty PSUs with all men boards, according to data collated by SES.

In the current regulatory framework, there is no requirement for companies to have women directors on Board. However, Clause 149 (1) of the new Bill proposes that at least one woman director should be on the Board of companies as may be prescribed.

“Every company shall have a Board of Directors consisting of individuals as directors and shall have— (a) a minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company; and (b) a maximum of fifteen directors: provided that a company may appoint more than fifteen directors after passing a special resolution, provided further that such class or classes of companies as may be prescribed shall have at least one woman director,” the clause said.

 While the exact number of women required can be calculated only when the ministry defines the "class or classes of companies", it is expected that a majority of listed companies will be covered by this provision. The challenge then may be to identify enough women for fulfilling the mandatory criteria.

Prime directors, a site that runs a database of professionals available to be appointed as directors, says that out of 15,378 professionals whose records it maintains, only 437 (2.84 per cent) are Women.

“It might happen that many would strictly follow the words of the provision and not its purpose or spirit, i.e. companies will comply with the law and appoint a single woman director and not more than that. Whether Indian women on the board would be able to play the role of director as intended by the law or will just be sitting at home and playing the role of director on papers- remains to be seen. One another possibility might be that with the non availability of such female members, companies may fill up the position with relatives of directors and the promoters,” said a senior official from Corporate Professionals.