Sebi recently announced that all listed companies would be required to give more representation to women on their boards. At least 966 out of the 1,456 companies listed on the National Stock Exchange don’t currently have women directors, according to statistics compiled by indianboards.com, a website created by data provider PRIME Database in association with the National Stock Exchange (NSE).
|BRIDGING THE GENDER GAP|
E Balaji, an independent human resources consultant, said many companies may have a tough time finding credible women directors of sound professional standing in such a short time.
“It is going to be a difficult task if companies wish to hire really capable people. Companies which provide flexible work schedules allow women employees to take sabbaticals will be in a much better situation when it comes to meeting these new rules,” Balaji added.
He said while the move is a positive one for bridging the gender gap, companies may look to meet the norms through indiscriminate hiring.
Pranav Haldea, managing director of PRIME Database, agreed. “This welcome move will surely bring in a much-needed perspective and diversity in the boardrooms. However, the stipulation should have been that the women should necessarily be independent directors; otherwise, compliance may mainly be achieved in letter by getting the mothers, wives, sisters, daughters and other relatives and friends of the promoter on the board, who will have the same voice, defeating the very purpose of genuine gender diversity,” he said in an emailed press release. This would cause the new legislation to go the way of earlier steps to make boards more independent.
“This would be akin to how all companies had earlier complied in letter with the requirement of each board to have 50 per cent independent directors as there too, there are no eligibility norms. It is hoped that the detailed regulations shall prescribe women to be independent directors,” added Haldea.
The new norms are applicable from October 1, Sebi said in a statement.
Interestingly, the data also says that women account for only 597 positions out of a total 9,009 directors serving on the boards of NSE-listed companies, or 5.1 per cent of the total directors for listed companies.
Manish Sabharwal, founder of Teamlease, a recruitment consultancy, said structural issues associated with female labour force participation in India may affect how well these new norms will pan out.
“At 19 per cent, India has one of the lowest female labour force participation. It may act as more of an incentive for women to come into the labour force if they see more women in top management positions rather than on the boards of companies, since the former have more visibility,” he said.