Eighty-five women have been inducted into the boards of 80 Indian companies between February and now. The candidates have come from other corporates of course, but there are plenty from academia, consulting, research agencies and the government too.
Consider the line up. Sun Pharmaceuticals Ltd has appointed Rekha Sethi, director-general, AIMA, as an additional independent director while SAIL has taken on civil servant Parminder Hira Mathur as a part-time non-official director. Gillette India has hired Sonali Dhawan, marketing director of P&G, while Infosys Ltd, which already has former White House energy and climate change director Carol Browner on board, has brought in Biocon’s Kiran Mazumdar-Shaw. Power Grid Corporation has signed on Jyoti Arora, joint secretary, Ministry of Power. Three Bajaj companies—Bajaj Holdings and Investment, Bajaj Finserv and Bajaj Finance—have appointed business historian Dr Gita Piramal, and Sesa Sterlite has signed up Lalita Gupte, former joint managing director of ICICI Bank. Renowned chartered accountant Geeta Mathur has come on to NIIT’s board while Mindtree has snared investment banker Manisha Girotra.
Headhunters have had their hands full this year, identifying potential women candidates for the boards of public and private entities. The Companies Act 2013 had earlier mandated all public and private companies with a paid up capital of Rs 100 crore to have at least one woman director on board by April 2015. In February, capital markets regulator Securities & Exchange Board of India (Sebi) changed the deadline to October 1.
The revised deadline saw listed companies going into a frenzy locating suitable women directors. It’s not easy—both quantity and quality are involved.
As of June 12, according to Indianboards.com, a joint initiative of NSE and Prime Database, 918 companies of the 1,462 NSE-listed firms, including leading business houses like RPG Enterprises, Essar Group, Mahindra and Mahindra, and TCS, still didn’t have women on their boards. There are 577 women directors occupying 795 directorship positions. Of this, 212 hold 357 independent directorship positions and the remaining occupy non-independent posts.
There is also the question of eligibility. The directors have to be of sound professional standing. As per Sebi’s ‘fit and proper’ criteria, anyone with financial integrity, absence of convictions or civil liabilities, competence, good reputation and character, efficiency and honesty is eligible to be a board member. There are no qualifications specified for a director.
GV Prasad, CEO, co-chairman & MD of DRL, which has JP Morgan India CEO Kalpana Morparia as a board member, believes the new hirings are on the right track. “If you notice, companies are inducting women who are qualified professionals and who can guide strategy and drive change,” he says.
But that’s not always the case. No doubt prompted by the Sebi deadline, many companies have inducted women from the promoter families. That’s true of Century Textiles, which has hired Sarala Birla, Raymond Group (Nawaz Gautam Singhania), Godfrey Phillips (Bina Modi), Jindal Drilling & Industries (Saroj Bhartia) and Cera Sanitaryware (Deepshikha Khaitan). Nita Ambani joins Reliance Industries on June 18.
Accounting firm Grant Thornton is a critic of this policy. “Women from promoter families, unless active in business or suitable, should be avoided, for reasons of governance and other practical considerations,” it said in a note last year.
But not everyone agrees. “If men from the promoter family can join the board, why not women? It’s a myth that women from the promoter family only provide a token presence. Social structures have changed and women, whether from the promoter family or not, challenge decisions of the board if necessary,” explains Rajeev Talwar, executive director, DLF, adding, “Women are considered to be more transparent in corporate practices and that will improve responsibility of the boards.”
Adds TV Sandeep Kumar Reddy, managing director, Gayatri Projects Ltd: “Women from the promoter family have a concern about the business and where the company is heading. Even though they do not oversee day-to-day operations, their foresight is valuable and even essential sometimes.”
Sangita Reddy, executive director, Apollo Hospitals says, “Our system has been more male-oriented, and to break through the glass ceiling takes time. But more than the law, it’s the realization that women have made their mark in every other field—so why not in the board room?”
She adds, “A women brings certain skills that a male member might miss out on. Empathy and multi-tasking comes naturally to the women of today and those skills can help the board of directors look at issues in a different light. We women are good at spotting opportunities where none exist; we can run a household on a tight budget –and all these help in the running of a company.”
Sensing the upcoming demand, in July 2013, Arun Duggal, chairman, Shriram Capital, along with PWC, got together 40 enterprising women from diverse fields such as software, consulting, management and advisory services to groom them for positions on company boards. Considering the deadline, one would think that these women would be flooded with multiple offers. Apparently not.
“There’s difficulty in finding professionally-run companies where women can be inducted as directors. A majority of the companies, even today, are run in old-fashioned ways and have their own circle of men representing the boards,” says Savita Mahajan, deputy dean, ISB and board member of IFCI and Institute for Leadership Development. Mahajan was one of the 40 participants in Duggal’s mentorship initiative but says she has not got any new offers from companies.
Still, Prasad of DRL believes there are plenty of takers for the qualified and experienced women professionals in the country. Women have already broken the glass ceiling in sectors such as financial services and pharma with the likes of Chanda Kocchar, Naina Lal Kidwai, Kiran Mazumdar-Shaw and Arundhati Bhattacharya at the helm of leading businesses, he says. “It’s only a matter of time, before you see them crowding boardrooms,” he adds. Amen to that.