Opinion | Gender diversity aids corporate governance2 min read 13 Oct 2019, 10:28 PM IST
Compliance with rules is not the reason our businesses should have women in boardrooms. Firms with a better balanced gender ratio are better governed and deliver superior results
You may strain your ears and still not hear it. The glass ceiling on women getting into corporate governance is either not being shattered, or not being smashed loudly enough to make much of a difference. To promote gender diversity at the top of India Inc., the Companies Act of 2013 had made it mandatory for publicly listed companies as well as those with a turnover of over ₹300 crore to appoint at least one woman director. It did set off an uptrend. According to Prime Database, a data services firm which analysed the board composition of the top 500 companies listed on the National Stock Exchange, female representation rose from 5% in 2012 to 13.8% in 2017. But since the requirement could easily be met by having a member of the promoter’s family join the board, the Securities and Exchange Board of India ruled in October 2017 that every firm listed on stock markets had to have at least one independent director who was female. The proportion of women has since risen to nearly 17%, by Prime Database’s estimate. By the numbers of the 2019 edition of the Credit Suisse Gender 3000 report, though, Indian boardrooms have just a tad above one woman for every six men, while the global number is about one for every four. Whichever way you look at it, the ratio is still disappointing.