The goal appeared simple: finding one woman to sit on the board of all listed Indian companies. But after a year, dozens of firms are still scrambling to fill the positions, turning the spotlight on the lack of women in top leadership positions in India.
The progressive legislation passed a year ago was meant to ensure gender diversity and raise the profile of women at the top of the corporate ladder.
But by the time the April 1 deadline passed, about 150 companies out of about 1,475 listed firms had failed to name a woman to male-dominated boards.
And nearly half the companies that did fulfill the requirement appointed female relatives, wives or daughters to the boards. That included India’s largest conglomerate, Reliance Industries, which installed the chairman’s wife, Nita Ambani, on the board.
'Mockery of the law'
Pranav Haldea of market research group PRIME Database in New Delhi questions such “check-box” compliance.
“More worrisome is how the compliance has been achieved even by companies which have gone about and done it. It is basically a mockery of the law, which has happened. We feel they (female relatives) would obviously have the same voice as the promoter and that defeats the purpose of genuine diversity,” Haldea said.
Many firms cited a shortage of skilled talent to fill boardroom positions.
Uday Chawla, head of the executive search firm Transearch India, scouted for the right candidates and said the challenge was to find women who have served on boards.
“The more professional companies want women on the board who can add value to the board rather than a check-mark against this particular requirement. Therefore, the brief that we get is very, very tight in terms of their requirements. One is competency, the other is experience, both are important. And there are very few women who have the experience,” Chawla said.
Others said companies simply did not take the legislation seriously and failed to cast the net wide enough.
Whatever the truth, the inability of corporate India to find women to sit on its boards has brought attention to the low level of women’s participation in senior management positions. India has among the lowest proportion in the world - about 15 percent.
A study by Catalyst, a nonprofit organization that works to build inclusive workplaces, found that nearly 50 percent of women in corporate India drop out between junior and middle levels, compared with 29 percent across Asia.
Shachi Irde, executive director of Catalyst India WRC, said one of the reasons is women shoulder most of the family-care duties. She said companies need to implement progressive policies to retain more women.
“If you really look and ensure that the women are recognized, treated fairly, then there is a lot more of women that you can see in your organization rather than them dropping off," Irde said. "The challenge definitely comes when offices don’t have inclusive policies and she is pulled between both her home responsibilities and her office responsibilities."
Irde said many more women could be inducted on boards if companies do not restrict themselves to only those with previous experience, but look at those who are “board ready.”
Others, like Haldea, say that the whole issue also highlighted the failure of many Indian companies to recognize that more women at the workplace, including top management, add value to the firm.
“I do not believe that more laws is the solution. It is more of a struggle of changing a mindset of promoters. In case the management and promoters does not believe in good corporate governance, then there are always ways of meeting the law in letter but not really in spirit,” Haldea said.
While corporate boards in India have among the lowest levels of women representation in the world, the gender divide at the top tier exists in other countries, too.
Countries that have the most women on its boards include Norway, Finland and France, which have government-mandated quotas for women.