It has been little over a year since the Securities And Exchange Board of India (SEBI), the country’s market regulator, made it mandatory for listed companies (pdf) to have at least one woman director on their boards.
Indian companies have till April 1, 2015—or two more weeks—to comply with the new rules. The earlier deadline was Oct. 1, 2014. Despite the six-month extension given by the SEBI, most companies have failed to appoint a woman director.
Of the 1,479 companies listed on India’s National Stock Exchange (NSE), 451—or one-third—still haven’t complied, data from PRIME database, a capital markets information provider, shows. The data is accurate as of March 15.
This means that women directors need to be appointed at the rate of 30 per day for the next 15 days for these NSE-listed firms to be compliant, according to Pranav Haldea, managing director of PRIME database.
At the 200 leading companies listed on the Bombay Stock Exchange (BSE), women hold 9.5% of all the board seats.
Since the Feb.13, 2014 SEBI board meeting, when the clause was announced, 580 companies have complied with the requirement, the data shows.
But no one is actually sure of what will happen if companies fail to adhere to the new norms.
Jayant Sinha, minister of state for finance, said on March 17, that the markets regulator will take “necessary action” against companies who fail to appoint a woman director.
India has been criticised for the lack of female participation in its workforce. As of July, only 6% of the total directors on boards in India were women, according to a report (pdf) by Biz Divas and law firm Khaitan & Co. Globally, France leads the list of top 10 countries with the highest number of women directors, the same report said.
Bedroom to boardroom
Meanwhile, many companies have found a particularly easy way of adhering to this new regulation: They have appointed female family members to the board.
The 580 companies who have complied so far have appointed 529 women directors to 605 positions. And at least 83 of these positions have been given to women who are part of the promoter group.
Mukesh Ambani, India’s second richest person, has appointed his wife Neeta on the board of Reliance Industries.
Ritu Mallya, the stepmother of Vijay Mallya, the owner of the bankrupt Kingfisher Airlines, has been appointed as a director of Mangalore Chemicals & Fertilizers.
Raymond, one of India’s oldest and largest fabric retailer, has appointed Nawaz Singhania, wife of managing director and chairman, Gautam Singhania, a member of its board.
“These women shall have the same voice as the promoter, defeating the very purpose of genuine (independent) gender diversity,” said Haldea.
Some woman directors also serve on multiple boards.
For instance, Renu Sud Karnad and Ramni Nirula are directors in seven company boards each.
Karnad is the managing director of HDFC Corp. Here are the boards she serves as a director on:
- ABB India
- Gruh Finance
- HDFC Bank
- Indraprastha Medical Corp
- HDFC Corp
Nirula is the vice-president of the ICICI Foundation. She is part of the boardroom at:
- Jubilant Foodworks
- Mcleod Russel India
- Sona Koyo Steering Systems
- Usha Martin
- DCM Shriram
- Eveready Industries
The companies with the highest number of women directors include Apollo Hospitals Enterprise, Taj GVK Hotels & Resorts, Indraprastha Medical Corp. and Monte Carlo Fashions, with four women directors each, according to PRIME database.