Wanted: Woman directors for 966 NSE-listed companies

Feb 17,2014

COIMBATORE: The new Companies Act has opened the door for women in a big way. Nearly two-thirds of the listed companies' boards would now need a woman director.

According to indianboards.com, a joint initiative of PRIME Database and National Stock Exchange ( NSE), as many as 966 out of a total 1,456 NSE-listed companies do not presently have a woman director, which means an immediate need for 966 women directorship positions in the next seven months.

Following the Companies Act, market regulator SEBI has now mandated that the board of every listed company should have at least one woman director. "This welcome move will surely bring in a much-needed perspective and diversity in boardrooms," according to Pranav Haldea, managing director, PRIME Database, which compiles data on the primary capital market.

However, the stipulation should have been that the women should necessarily be independent directors, he said. Otherwise, compliance may mainly be achieved in letter by getting the mothers, wives, sisters, daughters and other relatives and friends of the promoter on the board who will have the same voice, defeating the very purpose of genuine gender diversity, according to him.

"This would be akin to how all companies had earlier complied in letter with the requirement of each board to have 50% independent directors as there too there were no eligibility norms," Haldea said. "It is hoped that the detailed regulations shall prescribe women to be independent directors," he said.

According to indianboards.com, across all NSE-listed companies, there are just 488 women presently occupying 597 directorship positions. Of these, while 332 women are holding 366 non-independent directorship positions, only 174 women are collectively occupying 231 independent directorship positions (18 women hold both independent as well as non-independent positions).

Thus, if the requirement was for boards to have independent women directors, as many as 1240 companies (or 85% of companies) would need to meet the norm.

Among women directors, Renu Sud Karnad has the maximum number of board positions at nine of which six are as an independent director followed by Ireena Gopal Vittal at seven (all of which are as an independent director).

Only 32 companies have a woman chairperson/co-chairperson, of which only one is an independent director. The company with the highest number of women directors is Apollo Hospitals Enterprise (4), though none are independent directors.

On an aggregate basis, there are a total of 9,009 persons occupying a total of 11596 directorships in NSE-listed companies. Of these, only 597 positions are held by women or just 5.1%.

Even in the 217 prominent unlisted financial institutions (AMCs (asset management companies), AMC trustees, insurance companies, exchanges, unlisted banks, clearing corporations, depositaries, pension funds, debenture trustees and primary dealers) covered by indianboards.com, women directors occupy only 5.1% of total directorship positions.

There is not even a single woman director in as many as 70% of such companies while 90% of such companies do not have a woman independent director. Across all such organizations, there are 54 women directors occupying 61 directorship positions.