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Fully 51 percent of Indian companies required by a new law to appoint at least one woman director to their boards have failed to do so less than a month before the Oct. 1 deadline.
According to a report by Prime Database, of the 1,469 companies listed on the National Stock Exchange, 755 had as of Aug. 31 failed to appoint a woman board director.
The Companies Act of 2013 obligates every listed company and every public company with a minimum paid up share capital of 1 billion rupees ($16.5 million) or an annual turnover of at least 3 billion rupees ($49 million) to appoint at least one woman director to ensure greater accountability and improved corporate governance.
Existing companies have to meet the deadline by March 26, 2015, while new companies must make the deadline within six months from their date of incorporation. For Indian companies listed on the stock exchange, the Securities and Exchanges Board of India (SEBI) has assigned Oct. 1, 2014, as the deadline.
Between Feb. 13 when SEBI announced this deadline and Aug. 31, 244 companies have complied, according to Prime Database. Even so, women account for just 7 percent of board directors. India ranks 11th from the bottom in the International Labor Organization's ranking of countries' female labor force participation.
The research of ILO senior fellow Sher Verick has found that female participation in the Indian workforce follows a bell-shaped curve when correlated with education. Poor women with little or no education participate out of necessity, while those with mid-level education--usually from relatively well-off families--can afford to remain out of the workforce, and only the better-educated women are attracted to jobs which offer good opportunities and remuneration.
As a result, while the ranks of women in leadership positions are swelling, their absolute numbers remain small, and boardrooms continue to be male-dominated.
The August 2014 report Women on Boards: A Policy, Process and Implementation Roadmap from law firm Khaitan & Co. and women's network Biz Divas pointed out that international experience, even in developed countries, shows that mandates to appoint women directors or CEOs are most effective when backed by penalties for noncompliance. The Indian law does not provide for any penalty.
“Women are increasingly outnumbered as they rise through the ranks,” according to the report. “For example, the Fortune 500 companies of India, Reliance Industries and Indian Oil, currently have only one woman director between their total of 30 directors. The scarcity of talent is seen even at mid-management and senior-management levels, where there is a significant scarcity of women.”
The report found that some sectors do better than others when it comes to women's participation in the higher echelons.
“This may be due to the maturity of the industry and globalization as well as an impact on outsourcing, as we see Iron & Steel and IT Consulting & Software top the list,” the authors said.
The report suggested mentoring and networking programs for women, mechanisms for retention of women in the workforce and even radical measures such as quotas at every level so that more and more women comprise each level of the corporate hierarchy.
To contact the reporter on this story: Madhur Singh in Chandigarh: firstname.lastname@example.org
To contact the editor responsible for this story: Rick Vollmar at email@example.com
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