Elusive inclusivity: Why gender diversity on boards needs a fillip

Gender diversity in India Inc past the mid-point of the third decade of the 21st century remains an elusive goal. According to the Ministry of Corporate Affairs (MCA), 68 per cent of directors registered in January this year were male. The MCA’s latest bulletin points out that although the number of new registrations for director-identification numbers has been rising each year, this proportion has stayed unchanged for the past four years. More significantly, perhaps, private companies outperform their state-owned counterparts on this parameter: Women account for 20 per cent of directorships in government-owned companies versus 29 per cent in private firms. When narrowed to the Maharatnas and Navratna companies, the track record is worse. A study by Excellence Enablers showed that there were only 11 per cent of women directors in this class of high-performing state-owned companies in FY2025.

 

Private companies in India should not be regarded as beacons of social progress, however. The rules mandate that listed companies with a turnover of over ₹300 crore or paidup capital of ₹100 crore or more must have at least one woman director. Many companies tend to follow the law in letter rather than spirit by appointing promoters or their relatives to the position. Later, rules for the top 1,000 listed companies were tightened to specify the appointment of at least one independent woman director. As of March 2025, nearly 97 per cent of companies listed on the National Stock Exchange have at least one woman director on the board. Though this must be seen as heartening progress, more than half the companies have just one woman director. This fact suggests a token approach to regulatory compliance. That said, India has undoubtedly made progress. The most recent record must compare with the year 2014, when gender-diversity laws came into force and when women directors accounted for just 5 per cent of corporate directorships. Interestingly, India outperforms China on this score. In China, women hold only 13 per cent of board seats in state-owned firms and 18 per cent in private companies.  

 

One dimension of the persisting paucity of women directors vis-a-vis their male counterparts concerns work cultures. Many organisations suffer a “missing middle” in terms of gender diversity, with women dropping out at demanding mid-management levels because of non-conducive social ecosystems. These can range from outright misogyny, women fitted into “soft” roles such as human resource or corporate social responsibility, social activities that exclude women colleagues (meetings at bars after hours, for example) or scheduling meetings outside working hours. Given that most Indian women bear the brunt of housework, childcare, and elder-care, such exclusionary practices militate against their ability to stay the course up the corporate ladder. These are structural issues that the law can address up to a point. Greater economic liberalisation could also be a guarantor of gender diversity. With the exception of the information-technology sector, Indian companies focus on relatively protected domestic markets rather than facing global competition. This factor alone mutes the demand for talent. Integration with global supply chains would automatically expand the market for talent, making it difficult to discriminate against qualified women.