Women Directors: Changing Boardroom Dynamics
By: FCS Jaya Sharma-Singhania, Founder, Jaya Sharma & Associates | Saturday, 11 February 2023
FCS Jaya Sharma-Singhania, Founder of Jaya Sharma & Associates, Corporate Legal Advisory Firm located in the finance Hub of India with a pan-India presence and catering to international clients for more than a decade. A strategic thinker with a high EQ and end to end solution provider in Corporate Laws, Startup Advisory, Legal & Secretarial Due Diligence, CSR Advisory, Corporate Governance & Compliance Audit, IPR, Women & Independent Director Advisory, People Management capabilities to name a few. Have authored various articles on corporate laws.
The peer reviewed firm has been instrumental in guiding its clients with a rare blend of best professional advice and unparalleled personal service according to the client's needs. With the world having no territorial limitations, the firm caters to clients on pan-India and foreign clients.
Creating visionary leaders beyond compliance is ingrained in the DNA of every team member associated with her and the firm.
Directors being the governing body of a Company, have to consistently thrive to bring in valuable insights and experiences to provide solutions from a wider perspective. The Board must comprise of perfect blend of insights and experience and hence should ensure diversity. Diversity can be ensured in plethora of instances out of which gender diversity is a subset but an influential one.
The stereotype of “all boys club” and “alpha dog” are still prevalentin the Indian companies. Moreover, this club members make their attitude apparent by walking out, looking away or scanning their phones when a woman director starts to speak.
Time and again this stereotype have proven wrong by women who are here to carve their niche and prove that women do bring in value to the Company. Ensuring gender diversity has a correlation with social equity and human rights.
Dimensions of Gender-diversity:
- Augmentation of effectiveness of Board:
Research and studies do reveal that better gender diversity augments the effectiveness of board in the formof better monitoring, improved decision-making and more balanced policies. Such gender-diverse companies are less insolvency risk averse.
- Moving away from tokenism:
Board cannot comprise of Directors just for the sake of filing the position.If you do, either the person or the organisation will have a problem, because now you have to publish skill metrics as well. The idea is that having people from differentbackgrounds would bring in diversity of opinions.
- Leverage on the talent pool:
The ubiquitous problem of ‘leaking pipeline’ disdains the growth and accomplishments of women. Women independent directors, have acted as role models, ensured the interests of women in the workforce and pushed for hiring of more women, among others. Gender-diverse companies ensure greater connect with women employees.
- Being responsive to customer needs:
Having women on boards, who in many cases would represent customers of the company’s products and services,could improve understanding of customer needs, leading to more informed decision making.
Focusing on the Indian Context:
With an end goal to achieve gender diversity in Indian Companies the Companies Act 2013 mentions the criteria of companies who need to appoint women directors are:
- Every Listed Company;
- Every Public Company having minimum paid up share capital of Rs.100 crore or more;
- Every Public Company having minimum turnover of Rs.300 crore or more.
As per the amendment in Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, makes it mandatory for top 500 and next 500 listed entities, based on market capitalisation, to have at least one independent woman director by April 2019 and April 2020, respectively.
Consequent to such measures by the legislations the number of women directors on India Inc. boards has gone up nearly eight-fold but the same was fulfilled by appointing a relative on the Board or more popularly known as the “golden skirt phenomenon”. Though the numbers are still not substantial, IndraNooyi, former CEO of Pepsico, says it’s a good beginning. “One of the things we discovered wasthat before the mandate, search firms dismissed women when the list was produced.Now that there is a mandate, people are saying wow, there is an awful lot of qualifiedwomen I could pick from!”
We are now witnessing a generation of very ambitious and driven female corporate leaders ready to take on those big roles and step into the game. We have a good number of women who are super-smart, super-driven — who scare the socks out of you. We hope I will see an all-woman board in an Indian company in my lifetime. The regulator might then have to mandate that boards must have at least one man.