On Monday, about 120 companies added women directors to their boards, the highest such addition on a single day, as the Securities and Exchange Board of India (Sebi)-mandated deadline for companies to have at least one woman director on their boards neared. Ahead of the April 1 deadline, many more listed companies are expected to hold board meetings on Tuesday to approve the appointment of women directors. DB Realty, Ramco Cements, Alstom T&D India, Asian Hotels, Hindustan Motors, Lanco Infratech, Panacea Biotec were among those that announced the appointment of women directors on Monday.
“In the past four or five days, we have seen a lot of companies appointing women directors to comply with the norms. However, there would still be many companies, including public sector undertakings, which might not be able to meet the requirement,” said Pranav Haldea, managing director, Prime Database. Experts said several of the top 200 companies were yet to meet the norm. These included public sector entities such as Container Corporation of India, Punjab National Bank, Indian Bank, Mahanagar Telephone Nigam Limited (MTNL), Power Finance Corporation and Rashtriya Chemicals and Fertilisers.
As of Friday, 1,590 companies on the BSE and 355 companies on the National Stock Exchange (NSE) were yet to appoint women on their boards, according to data from Prime Database. There are 3,960 listed companies on the BSE and 1,478 listed companies on the NSE. As such, even after Monday’s announcements, 1,400 companies on the BSE and about 200 on the NSE are yet to appoint woman directors.
In February 2014, Sebi had issued guidelines asking listed companies to appoint at least one woman director on their boards by October 1, 2014. Later, the deadline was extended to April 1, 2015.
Speaking at a Confederation of Indian Industry-organised capital markets seminar on Monday, Sebi chief U K Sinha said many companies were lax about complying with the norms. “Having at least one women director in the board is a Sebi requirement, as also a Companies Act requirement...I suspect there are a number of companies that have not found competent women to be on their boards. Such an attitude should be contained. What messages are we giving to the outside world on a small matter like this?” he asked.
He said companies that didn’t meet the deadline would have to pay a penalty. However, he didn’t give details in this regard. Representation of women on company boards has become a major issue globally, with countries and companies mandating gender quotas in boardrooms. Recently, Germany announced at least 30 per cent of supervisory positions must be filled with women.
According to a 2014 survey by MSCI, boards with gender diversity, over and above regulatory mandates or market norms, had fewer instances of governance-related scandals such as bribery, corruption and fraud.