Out of the top 150 listed companies in India, only 3 companies opted for a woman chairperson, reflecting skewed female representation as chairperson. According to a study 'Governance Observer' by advisory firm Grant Thornton, merely one out of every 17 board directorships in these companies is held by a woman.
The Grant Thornton report on the composition and conduct of corporate boardrooms in India showed that the average age of the directors on Indian company boards is 61 years. It ranged from 59 years for banking financial services and insurance sector to 62 years in the manufacturing sector. Further, the study said that 49% out of 1453 directors are more than 60 years of age.
Harish HV, Partner National Management, Grant Thornton India LLP said, "Corporates meeting regulatory requirements which some years ago was considered a great quality are no longer treated as such and they need to keep pushing towards higher and higher standards of governance and transparency to achieve the benefits and value that Good governance brings.. "
As per the report, the number of directors on the boards varies between 4 and 20. The average number of directors on board of top 150 listed companies stands at 11, with the manufacturing sector taking the lead in having the maximum number of directors on the board. A total of 23 companies in this sector had 10-12 directors on their boards while 17 companies had 13-18 directors. Companies with turnover higher than INR 100 billion preferred a bigger board size with 27 of them having 10-12 directors and 20 companies having 13-18 directors on their boards.
While the growing role of women in the corporate sector has raised the pitch for boardroom diversity, the report reflected that the female representation as chairperson is miniscule in India. The study found that only 1 out of every 17 directorships (102 out of 1612 directors) is held by a woman. Only 81 women are holding the post of non-executive and independent directors while 21 women are executive directors. Also, 55 (54% ) are independent women directors. The Companies Bill 2013 has called for the appointment of at least one woman director in specified classes of companies, to improve gender balance.
The average directorships held by a director is 5. 124 out of the top 150 listed companies have appointed non-executive non-independent directors on their boards. They account for 20% of the total directors in these companies.
With respect to the Companies Bill 2013, the study said that the bill seeks to vastly improve corporate governance in listed companies through provisions relating to the appointment and conduct of the Board, Audit Committee, Nomination & Remuneration Committee, Stakeholders’ Relationship Committee, key managerial personnel and auditors.
Ajith Bhaskaran, Partner, Business Risk Services, Grant Thornton India LLP said, "The legislative intent is clear and paves the way for an era of good governance. Results would follow from affirmative action by companies. Companies must build good governance within its organisational DNA than carry out changes from merely a compliance perspective."
The study is based on the information available in the public domain on India's top 150 companies by market capitalisation, the annual reports and public filings of financial year 2011-12 were also referred for gathering valuable information. The study covered a total of 1,612 active directors (existing or newly appointed directors on board as per the annual reports of Financial Year 2011-12). There were 247 director appointments and 240 director’s resignations during the year.