First, more than six months were given to listed Indian firms to find at least one female director for their boardrooms. Later, the deadline was extended by another six months—to April 1. Now, a day after the expiry of that revised deadline, many Indian companies have failed to comply.
Of the 1,457 companies listed on India’s National Stock Exchange—which were required to adhere to the rule—189 are still to find a female director, according to PRIME Database, a capital markets information provider. That is almost 13% of the 1,457 companies. (This data is accurate as of 4:30 pm on April 1.)
In February 2014, the Indian market regulator, Securities and Exchange Board of India, set a deadline of Oct. 1, 2014 for companies to find a woman director on their board. It was later extended to April 1, 2015.
During this period, 820 companies appointed a female director on their boards. The market regulator could fine companies that failed to meet the deadline anywhere between Rs5 lakh ($8,039) and Rs25 crore ($4 million).
Many companies simply elevated family members to the position of directors. The data shows that 103 women of the total directors appointed belong to the promoter group.
Fifteen days ago, as many as 451—or one-third—companies had not filled up the positions.
Meanwhile, there are several government-owned firms that have failed to appoint women directors within the April 1 deadline. For instance, state-owned companies like hydro power generator NHPC, India’s biggest explorer Oil and Natural Gas Corp, and Bharat Petroleum Corporation, a Fortune 500 oil company, have not yet complied.
Historically, India has had a low female participation rate not only in corporate boards, but also in its labour force.
“There is an ecosystem geared towards negative selection that excludes women. The job criteria are fashioned out in such a way that only men will make it to the short list,” Kiran Mazumdar Shaw, chairman and managing director of Biocon, India’s largest biotech firm, said in June.
“So while a company advertises for talented risk-takers on one hand, the board is actually risk-averse and steeped in convention when it comes to allowing women to join their ranks.”
Some of the most popular woman directors who serve on multiple boards include HDFC managing director Renu Sud Karnad and ICICI Foundation vice president Ramni Nirula—each appointed on seven boards.
Following Nirula and Karnad are Renu Challu, Geeta Mathur and Ireena Gopal Vittal, with six-board memberships each. Challu is a former banker, while Vittal is a former McKinsey consultant.
According to PRIME, the companies with the highest number of women directors are Apollo Hospitals Enterprise, Indraprastha Medical Corp, and Monte Carlo Fashions—each with four women directors.