According to a recent research by Institutional Investor Advisory Services, gender diversity on the boards of Indian corporations has increased, with women's presence on the boards of Nifty500 companies increasing nearly thrice from 6% in 2014 to 17.6% at the end of FY22.
The research said that the rate of growth has slowed down in the last three years, with an overall gain of barely 1%.
Only 827 of the 4,694 directorships in the Nifty500 companies, or 17.6% of the total, were held by women.
Beginning in April 2014, corporations were required by the Companies Act 2013 to have at least one female director on the board. Before this, the percentage of women on the boards of these Nifty500 companies ranged from 5 to 6%. The research states that in the first year, this doubled to 11%.
While the growth was consistent throughout the following few years, it slowed in 2019 and women's participation at Nifty500 businesses has climbed by just 1% in the three years since then.
The Companies Act of 2013 mandates the appointment of at least one woman director for any listed, private, or other public business with a paid-up share capital of at least 100 crore or a revenue of at least 300 crore.
Additionally, the SEBI (Listing Obligations and Disclosure Requirements), 2015 requires the appointment of at least one female director to the board of directors for listed businesses.
Refreshing the board: the grandfathering of director terms is over
According to the survey, something else has slowed down in addition to the rate of development in female directorships. India falls short of the global average of 24% female boardroom presence.
According to the report, India will not reach its goal of 30% gender diversity on corporate boards until 2058 if it continues on its current course.
According to the research, there is some reason for optimism going forward because "the approaching 2024 board refresh presents a unique chance to reset the pace of change" and marks the end of the grandfathering of Independent Directors' prior tenure.
Grandfathering is the practise of continuing to apply an old rule to certain current circumstances, in this example, the prior terms of independent directors.
159 of the 500 firms on the Nifty500 have a board with at least 20% female representation. The survey also notes that at least two female directors were present on the boards of 48.6% of the Nifty500 companies.
But with only 13.54% of boards in the public sector being made up of women, the situation there is grave.