Breaking Down Boardroom Barriers: A Closer Look at Gender Diversity in India Inc
A decade after the enforcement of the Companies Act 2013, which mandated companies to have at least one-womandirector on their boards, statistics reveal that one in every five board members in Nifty-500 companies is now a woman. This reflects substantial progress from five years ago, where only one in eight directors was a woman. Despite this advancement, there remains a dual perspective on the state of board diversity. While the legal mandate has led to compliance, with almost all 500 companies featuring a woman director, it has also resulted in a somewhat symbolic presence, as 45% of Nifty-500 companies have only one-woman director. The size of the board seems to accentuate gender disparities, with 81 companies having merely one-woman director on boards of ten or more members.
The scarcity of women directors is attributed to prevalent hiring practices, where independent directors are often selected based on prior interactions, perpetuating a male-dominated board composition. Globally, S&P 500 companies boast a more balanced ratio, with one in three directors being a woman, driven by external pressures from investors and proactive initiatives promoting gender diversity. Among the Nifty-500 companies, 22 firms exhibit women representation at 40% or more. However, barriers to entry persist, including limited board experience and inadequate promotion of gender diversity.
Despite India”s strides, achieving greater gender representation on boards necessitates more affirmative action, encouraging a broader pool of qualified women to participate in directorships actively. The imperative for change underscores the critical role that diversity plays in fostering innovation, resilience, and sustainable corporate governance.
While India Inc has made significant strides in enhancing gender diversity on boards, there remains a dichotomy in the impact of the Companies Act 2013. The legal mandate has undeniably ensured the presence of women directors, yet the majority of companies have just one woman on their boards, limiting the scope of genuine diversity. The size of boards exacerbates this issue, revealing a persistent gender disparity. To truly empower board diversity, proactive measures are needed to overcome existing hiring biases and encourage a more inclusive selection process. The global context highlights the need for companies to move beyond mere compliance and embrace diversity as a strategic imperative for long-term success.
