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Business News/ Companies / News/  Women directors: the number games

Women directors: the number games

The Companies Bill mandates that a firm should have at least one woman director on the board. Does India have enough women leaders?

Photo: Priyanka Parashar/Mint (Priyanka Parashar/Mint)Premium
Photo: Priyanka Parashar/Mint
(Priyanka Parashar/Mint)

The Companies Bill that was recently passed by Parliament mandates that a company should have at least one woman director on the board. Does India have enough women leaders to meet this requirement? According to Zia Mody, the founder of Mumbai-based AZB & Partners, ideally, a board should have at least two women directors to have a quality discussion. Here’s what some of the other heavyweights of corporate India have to say on the subject:

Morparia, who often figures in the list of most powerful women in Indian industry, says there are several thousands of capable women around to be on the boards of Indian companies.

“I don’t understand why such questions should arise about the availability of women as board directors. However, it is a good start by the government to mandate at least one director on the board of companies. I truly believe that once these companies fulfil these mandatory requirements, they will start witnessing the merit of women directors on the board," says Morparia.

Morparia serves as an independent director on the boards of several leading Indian companies.

“I think that women directors will bring diversity to the boards of Indian companies. They can bring richer corporate governance standards and can improve the quality of discussions on the board rooms. As there are representations for academic and ethnic interests on the board, women directors will bring meaningful diversity," Morparia says.

Morparia says that it is condescending that some people are starting an initiative to mentor women executives to help become better directors on the board. “If the idea is to mentor somebody to become a better director, then the training should be given across the board. You cannot single out women. We don’t need any separate treatment," she adds.

Rama Bijapurkar, an independent director on the boards of several Indian companies:

Companies often say that there are not enough women to choose from, despite wanting more of them. Here’s a way to try and find them. There are not enough women directors because the nominations committee process is usually not as formal and rigorous as it should be."

“It is sometimes done by the managing director who tells the committee that ‘these are the independent directors that we would like to have or here is a shortlist for you to choose from’."

“It is sometimes done by the committee or the board saying ‘let’s wrack our brains… who do we think will be a good director, who has the following qualifications or experience’."

“This use of informal networks and processes, while it may have its advantages, also has the problem of narrowing the pool to ‘people we know’." And then, predictably and understandably, given the prevailing ratio of women in the workplace in senior positions, the men have the advantage of numbers.

“Search firms who specialize in board member search, because they search systematically and rigorously, usually do throw up a much larger and a high quality pool of women director candidates. However, many of the better or bigger ones charge very high search fees, which tends to be seen as unviable for many boards."

“I think voluntary affirmative action by boards saying they want at least two women directors, with inclusion and excellence both as non-negotiable parameters will make all of us on boards try harder. Why two directors? Because we have to go beyond the tokenism of one, and there may be economies of scale in the search!"

Amit Tandon, founder and managing director of Institutional Investor Advisory Services India Ltd:

I believe there are fantastic people out there who can add value to the board. You are talking about 6,000 companies and you can surely find out 6,000 women" to be on the boards of these companies, says Tandon.

Tandon, who was previously managing director of Fitch Ratings, points out that half of India’s population comprises women and it is not difficult to spot the right people for the boards.

“I know a chairman of a reputed company who shrugs off a woman director citing she is a lady. There are many male directors on the board who are not adding any value. And it’s as much about the attitude of the other board members and how the board meetings are conducted," Tandon says.

While for some this may end up as tokenism, many companies have a chance to make the right choice and gain from the skills women bring to the board rooms, he says. “We had started asking companies about women directors three years ago as part of creating awareness," says Tandon, whose firm specializes in advising institutional investors about the management affairs of companies.

Tandon adds that people such as Arun Duggal, chairman of Shriram Capital Ltd, have started an initiative to train women directors. Deepak Parekh, chairman of Housing Development Finance Corp. Ltd, and M. Damodaran, former chairman of the Securities and Exchange Board of India, are also mentoring women to become effective directors. “However, it is not going to be an easy task to find the right women candidates. For that, companies will have to broadbase search," Tandon adds.

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Published: 14 Aug 2013, 12:20 AM IST
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