Women demand reservations in top board positions in PSUs7 min read . Updated: 11 Apr 2010, 10:56 PM IST
Women demand reservations in top board positions in PSUs
Women demand reservations in top board positions in PSUs
New Delhi: Corporate boardrooms have been bastions of male dominance, but a fiesty group of women employed by Central public sector companies are demanding a seat at the high table of corporate power.
The Forum of Women in Public Sector (Wips), a network of at least 10,000 women across 246 Central government undertakings, is demanding reservations in top board positions, which it believes is the only way to shatter the glass ceiling in companies dominated by men. Representatives want at least one executive directorship and one independent directorship to be reserved for women.
Their demand comes a month after the Women’s Reservation Bill seeking to set aside one-third of the Lok Sabha and state assembly seats for women was passed by the Rajya Sabha. The quest for a greater say in how government-owned companies are run comes at a time when there are fresh debates worldwide on how women could bring innovative thinking and a new leadership style to boardrooms.
In June, Pratibha Patil, India’s first woman president, promised that her government will make “concerted efforts to increase representation of women in Central government jobs". On 10 April, the Public Sector Day, she stressed that women need to play a greater role “in the higher echelons of PSU (public sector unit) management". She was giving away awards at the Standing Conference of Public Enterprises, or SCOPE, an autonomous government body whose aegis Wips comes under.
Taking a cue from her statements, Wips representatives say women’s recruitment can only happen once companies become equitable employers and women can climb to the top of the ladder to take critical decisions.
Wips says the government should follow the Norway model. The Scandinavian nation reserves 40% of boardroom seats for women executives thanks to a 2003 legislation that sent representation up from 7% to at least 40%. Evidence from neighbouring Finland, another Nordic nation that has come to favour mixed gender representation in company boards, shows that a similar strategy has resulted in around 58% of listed companies having at least one female board member in 2009.
The numbers in India are dismal. Women constitute a mere 8.4% of the 1.5 million people employed across state-owned firms, according to the 2008-2009 Public Enterprises Survey. For managerial and supervisory roles, 34,904 women make the grade against 403,493 men. Women sightings are even more rare as one climbs the corporate pyramid, with only a handful of them making it to independent directorships.
According to a joint study conducted by consulting firm KPMG and WILL Forum India in 2009, women corporate directors accounted for just 4.8% of a total of 250 surveyed companies and 2.5% of independent directors. WILL Forum, which aims to support talent among women employees in workplaces, estimates that among the 35,000 directors in nearly 8,000 listed Indian companies, women constitute a mere 5%.
Among the first tasks the organization of women in public sector firms plans to undertake this year is prepare a list of competent women who can take charge as independent directors, says Reena Ramachandran, founder member of Wips, who insists that affirmative action is the only way to increase numbers. It has also requested SCOPE to map women’s competency skills across companies.
“Usually, the question asked is, where are the women? It’s the same reaction you get when talking about women’s reservation in Parliament or panchayati raj (village councils). Therefore, our roster is to show that here are the women," says Ramachandran, who also holds the distinction of becoming the first woman in the public sector to get elevated to managing director at Hindustan Organics Ltd.
The government does not deny equal opportunity to men and women. For instance, both have to compete on the basis of merit in government services such as the Indian Administrative Service. But often, “medieval practices" come into play during screening for plump postings, according to a senior woman bureaucrat who did not want to be named. “Then the individual’s worth is measured with networking capabilities," she said.
The department of enterprises, which is in charge of public sector companies, says it has not yet received any communication from the government to encourage women to apply. “The emphasis on PSUs has always been on higher profits and higher investment. But irrespective of reservations, they can become more proactive to achieve better representation of women," says Sharat Kumar, an economic adviser at the department.
SCOPE concedes there’s a good case to promote women in directorial posts and a reform in the selection process is the urgent need of the hour. “There’s no denying that women have not come up to the level of expectation. We are going to request all PSUs to evolve a women empowerment policy through board approval," says U.D. Choubey, director general of SCOPE. Some posts, such as corporate social responsibility, says Choubey, who’s also the father of two daughters, both software engineers, can be reserved for women.
But Rachel Mathews, chief manager at Indian Oil Corp. Ltd and current president of WIPS, lists corporate social responsibility among “soft jobs" and says women need greater visibility in tougher assignments. “Today many of the young engineers would like to be mainstreamed into main functions of production line. But women are sidelined in soft jobs, such as HR (human resources), services and sales. We’d like more ladies take up hard jobs," she says. Out of 35,000 employees at Indian Oil, 2,592 are women.
While quotas of any form is a sensitive issue, public discourses and academic reports differ on whether increase in women’s representation actually helps firms increase profits. A 2007 study on 14,020 Finnish companies by the Finnish Business and Policy Forum demonstrated that firms headed by women were 10-20% more profitable than those run by men. But last year, a paper on Norway’s change in board structure by two Michigan University researchers, Amy Dittmar and Kenneth R. Ahern, showed that quick induction of a large number of women has led to a decline in company values, that is “not caused by the sex of the new board members, but rather by their younger age and lack of high-level work experience".
Women who’ve actually become company directors in India through sheer sweat and loyalty continue to believe that women need to work hard at networking just like the “boys club" does. Anita Khurana, head of strategic business unit, cargo, had worked with Air India for more than three decades before she was selected to head the company’s cargo division. “It’s my individual approach and destiny that brought me to this position. But it’s true that it’s difficult to maintain this position without a network," she says
Thus, during the annual Wips meetings held since it was formed way back in the mid-1980s, it has become an occasion to network and coax each other to diversify their skill sets. They share tricks to move up: it’s harder for a human resources specialist to make it to chief executive officer, but the road to that goal is faster if an individual displays technical expertise or marketing brilliance, they tell each other. They celebrate small victories such as getting the department of enterprises to print data on women employment in annual surveys. In a subtle way, they are also attempting to influence the prestigious SCOPE awards by insisting on women’s development as an eligibility condition for companies that apply.
The women, more than before, realize that without a critical mass, not much is going to change on the ground as many women languish in mid-level career with little opportunities for growth. “Men would say all profit. Women ask at what cost? But somebody needs to take a hard look at the numbers," says Preeti Kaur, chief general manager in charge of publicity, precious metals, in MMTC India Ltd, a minerals trading company.
Above all, what bothers her are the stereotypical mindsets about women: Women prefer soft to hard postings; they are unwilling to work long hours. And invariably in office functions, it’s the women who are called upon to garland a visiting dignitary.
This conventional cliche, according to Poonam Barua, founder-president of WILL, needs to be changed. Cutting across the private and public sector divide, women have the same aspirational goals, she says. What is required is to accept that both men and women have different leadership styles. “The Wall Street crash has shown that the current leadership is not conducive to future thinking. Men are linear in their approach, women are democratic and public spirited."
Barua says perhaps, more than reservation, voluntary compliance on quotas could be an important step to bring changes at the decision-making level. “Otherwise, when years of historic inequities existed, where can there be meritocracy?" she asks.