ONE STEP FORWARD

THE NUMBER OF WOMEN INDEPENDENT DIRECTORS IS GROWING STEADILY, BUT IT'S A LONG WAY FROM GENDER PARITY. MUCH MORE NEEDS TO BE DONE TO BREAK THE GLASS CEILING IN BOARDROOMS.

- TEENA JAIN KAUSHAL

SINCE BOARDROOMS SHAPE a company's trajectory, effective ones must have varied voices, especially of those who are traditionally under-represented, to achieve a comprehensive, balanced outlook. However, despite the by-now well-known advantages of having diverse boards, progress in improving gender diversity has been slow, both globally and in India. Besides, it appears most often to be driven by legislative fiat rather than enlightened self-interest.

Take a look at India. It was among the first developing nations to introduce quotas for women on corporate boards. In 2013, the government enacted the new Companies Act, which, in Article 149, said every listed company had to have at least one woman director. The Companies (Appointment and Qualification of Directors) Rules, 2014, laid down further clauses in this regard. That was followed by the Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015, which made it mandatory for listed companies to appoint at least one woman director on their boards.

"For listed companies that fall within the Top 1,000 by market capitalisation, an additional stipulation mandates the inclusion of at least one independent woman director," says Harshita Agarwal Sharma, Founder of compliance solutions provider Lexlevel Services. This additional layer ensures that women directors are not merely appointed for compliance but can play a more autonomous role. These mandates aim to encourage inclusivity and gender representation across various sectors, even though private companies remain exempt from such obligations, adds Sharma.

Unlisted public companies must also comply if they meet specific financial thresholds, such as having a paid-up share capital of ₹100 crore or more or an annual turnover of ₹300 crore or more.