The issue of appointing women on corporate boards has come under sharp focus with the Securities and Exchange Board of India (SEBI) hinting at a tough action against erring listed firms.
A few days ago, SEBI Chairman U. K. Sinha came down heavily on corporate India for its failure to get more women into their boards. The regulator has imposed a quota of at least one female director on the board of every listed firm. The deadline now is April 1.
The task, however, appears challenging for companies. Finding right quality women to take on board roles that come with greater responsibilities is proving a tough job.
“Well, it is true you don’t get as much female leaders as male numbers. But that cannot be cited as a reason. It is the mindset that has to change. And, companies should continue their efforts to ensure women representation,” said an official of a leading global consulting firm, who declined to be quoted.
According to Prof. Kavil Ramachandran, Executive Director, Thomas Schmidheiny Centre for Family Enterprise, Indian School of Business, lack of appreciation for the role of a board as also the level of seriousness about the SEBI requirement and deadline — both in spirit and letter (most people expected SEBI to extend the deadline or didn’t expect a major penalty!) — are reasons for the delay in compliance.
Lack of awareness about the availability of qualified and competent candidates in adequate numbers is another key reason. “The reluctance of women candidates to accept directorship in any company in the light of greater responsibilities and penalties as per the latest Companies Act is also a reason,” he points out.Family businesses show the way
Many leading industrial houses in the South claim that they are already in compliance with the SEBI requirement. “I think all our listed companies are SEBI-rule compliant. Our boards have eminent women personalities, who have made immense contribution,” avers A. Vellayan, Chairman of the Murugappa group.
Prof. Ramachandran is of the view that family businesses have good representation of women on their boards. “Most family business boards function as extension of their families, and so naturally are driven by family and community traditions,” he points out.
A section in the domestic corporate world are concerned that the debate on women representatives on boards should not lead to hinder the process of ensuring ease of doing business, which should be the primary focus of the government.
“Diversity is essential, but you can’t force diversity in the name of regulations,” points out an industry representative, while admitting that women indeed bring unique strengths to the boardrooms.