BANGALORE: The resolute to have more women directors on company boards have not changed much since the verdict was passed last year for companies to increase the number of women directors in companies.
The Parliament made a mandatory law under ‘The Companies Act, 2013, last August for companies of both public and private firms that have an annual turnover of at least 3 billion to have at least one woman director on their board by October 1, 2014.
The problem with not having women directors on board is not just the problem in India but all over the world. India is the only developing country to impose a mandatory law on companies to have women directors. Countries like France, Spain and Norway have mandatory rules because of which Norway has seen a growth rate of 41 percent in 2013 of women directors on company boards.
Haigreve Khaitan, Managing Partner, Khaitan & Co said, "India is one of the fastest growing economies of the world, and the initiative for higher representation for women in the boardroom and senior management positions in the corporate world is a very significant move,” reports Business Standards.
The need for women directors on board is not just for Cultural Diversity but more so to be a balance in board rooms and help the company’s strategic business plans. Surveys conducted on the impact of women directors on boards have shown that companies have actually seen economic and business growth through their influence.
As per the mandatory law India will see a rise of 966 women on boards of director at the end of this year. Since the law was passed there has been a growth of 97 directorships in 94 companies. India can be a great success story to other developing nations if India can grow with a balance in gender in the work environment.
“Clearly, financial measures excel where women serve on corporate boards,” said Ilene H. Lang, President of Catalyst. The research done by Catalyst showed a strong correlation between corporate financial performance and gender diversity. India is on a good path of achieving this goal.