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Rush to add women directors on company boards as deadline nears

Of listed firms, about 580 have complied but 450 firms yet to do so, with two weeks left for extended time limit to end

Sneha Padiyath  |  Mumbai 

About 450 listed companies are yet to add women directors on their board, even as the deadline for the appointments ends in two weeks.

At least 30 appointments have to take place every day of this month if all these companies have to comply with the requirement of a minimum of one woman on the board of directors, laid down in the new Companies Act.

According to PRIME Database, 451 companies do not yet have any. A total of 580 companies have complied with the norm since the Securities and Exchange Board of India (Sebi) issued a circular in February 2014.

Prithvi Haldea, managing director, PRIME Database, said there was a flurry of activity among companies rushing to comply with the norms since the beginning of this month. “In the past two-three weeks we have seen companies hurrying to appoint women directors. But there are also those who are hoping that the deadline will be extended, as is usually done in such cases,” he said.

In February 2014, Sebi had said companies must appoint at least one woman on their board of directors by October 1, 2014. This was later relaxed to April 1, 2015.

“The exchange has sought periodic updates in the matter from the companies and...companies have either complied with or have initiated the process of compliance,\" said a spokesperson of the BSE exchange.

“We are interacting with listed companies about Sebi’s advisory and will apprise the regulator,” said NSE in an email response.

Several large-cap names are also yet to meet the required norms. The rule does not specify any eligibility criterion.

“There is no dearth of women who can qualify for this post but companies are taking their time because they don’t want strangers on the board. They want someone who understands the business, their responsibilities and can make a significant contribution as a board member,” said Haldea.

Experts say there is a shortage of eligible women who are willing to devote time and energy to such a job. “Directorship is a challenging and demanding job. It is time-consuming -- you are required to attend a lot of meetings, be a part of the decision-making and, in general, play an active role in ensuring good governance practices,” said Falguni Nayar, founder of FSN E-Commerce Ventures. “Not many women are eligible to do this job and among those who are qualified, not many are willing to invest so much time.”

Nayar is a director on the boards of Tata Motors and Dabur, among others.

Many companies are now conducting programmes to train women, within and outside the organisation, to groom them into becoming board members. Experts said such moves had encouraged a lot of women to consider such posts.

The issue has become one worldwide, with a number of countries and companies mandating gender quotas in board rooms. Germany is the latest country to announce that 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 the regulatory mandates or market norms had fewer instances of governance-related scandals such as bribery, corruption and fraud.

First Published: Tue, March 17 2015. 22:48 IST