Women on Boards – Legislative Amends vs Gender Equity at Workplace

Last Updated at: December 14, 2019
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A few weeks ago, Samira Ahmed, a chief presenter of a 15-minute show sued BBC over a massive gender pay gap, where the male presenter got £3000 while she was given £465 for the same show. BBC, one of the world’s best broadcasting and news companies, has since early 2017 been embroiled in several controversies over higher payments to its male staff. This is just the financial element of a larger gamut of issues affecting working women globally, that includes workplace harassment, gender insensitive remarks, issues with pregnancy-related leaves and delayed promotions due to maternity. At 13%, women in Indian boards are severely underrepresented. In this post, we highlight the gender bias on boards of companies, while also tracing legislative amends and examine possibilities that emerge from closing this gender equity in women’s representation on boards.

A world tolerant of low levels of leadership in women

Despite nature fostering equality in population, on the business front, less than 5 percent CEOs of the Top 200 Global Companies are women. Although India is one of the rare countries to have had a women Prime Minister as well as a President, few women are leaders of nations in today’s age. While we may have come a long way in improving gender violence, there are perceivably real yet invisible barriers that still exist which exhibit that as a society, we are content with very low levels of leadership by women in business as well as politics.

In India as well, the statistics are dismal. While female representation in India in senior management rose to 8.5% in 2019 from about 6% in 2016, we rank third-lowest in Asia-Pacific countries (at 2%) in CEO representation, as well as second lowest rank for female CFO representation at 1%.

Compulsory women representation on boards in India – Companies Act & SEBI Provisions

The Companies Act 2013 mandates that a public company or a private company, will be required to appoint at least one woman director if it fulfils any of the following criteria:

    • A listed company whose securities are listed on any stock exchange.
    • A company having paid-up capital of Rupees one hundred crore or more, and a turnover of Rupees three hundred crores or more.
    • All other provisions related to procedures, appointment, tenure and vacancy of women directors are akin to those framed for regular directors.

Talk to Our Legal Experts

SEBI in accordance with the Companies Act made it compulsory in 2014 for all listed companies to appoint at least one woman director. However, it realised that many of the companies started appointing women from promoter families to fulfil this legal requirement. Therefore, it introduced a provision to appoint an ‘independent’ women director, free of bias or a relationship with the promoter group of the company. Despite this, there exist at least 40% listed companies that have not complied with this provision.

Advantages of having women directors on your board

“To call a woman a weaker sex is a libel. If by strength, is meant brute strength, then indeed, women are less brute than men. If by strength is meant moral power, then women are immeasurably superior. Has she not greater intuition, is she not more self-sacrificing, has she not greater powers of endurance and courage?”  – Mahatma Gandhi

  • With more women leaders at the echelons of political decision making and commercial enterprises, the horizons of creativity and innovation can be broadened through diversity.
  • As board decisions become increasingly complex, with economic, financial, political and social problems to consider, having a diverse board with talented women drawn from different spheres is often linked to better performance.
  • More women would help unravel potential to resolve conflicts within boards, bringing a gendered yet unique perspective to board decisions.
  • Legal measures of enhancing women’s participation are essential but not always adequate as they’re forced and artificial. For true equality to exist, having women on board would encourage more women in the workforce and offer opportunities for promotion to higher positions in the workplace hierarchy.
  • Women are also known to bring a more holistic perspective to boardroom environment and work culture, making women at workplace feel safer, ensure better wages, fair recruitment and gender-neutral promotion policies.
  • Women entrepreneurs would help encourage more women, thus leading to better skills, opportunities and employment for everyone. This would not just lead to more inclusivity in participation and decision making in the industrial-world but also promote healthier and cohesive societies, as envisaged by the Sustainable Development Goal 9.
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Women on Boards – Legislative Amends vs Gender Equity at Workplace

471

A few weeks ago, Samira Ahmed, a chief presenter of a 15-minute show sued BBC over a massive gender pay gap, where the male presenter got £3000 while she was given £465 for the same show. BBC, one of the world’s best broadcasting and news companies, has since early 2017 been embroiled in several controversies over higher payments to its male staff. This is just the financial element of a larger gamut of issues affecting working women globally, that includes workplace harassment, gender insensitive remarks, issues with pregnancy-related leaves and delayed promotions due to maternity. At 13%, women in Indian boards are severely underrepresented. In this post, we highlight the gender bias on boards of companies, while also tracing legislative amends and examine possibilities that emerge from closing this gender equity in women’s representation on boards.

A world tolerant of low levels of leadership in women

Despite nature fostering equality in population, on the business front, less than 5 percent CEOs of the Top 200 Global Companies are women. Although India is one of the rare countries to have had a women Prime Minister as well as a President, few women are leaders of nations in today’s age. While we may have come a long way in improving gender violence, there are perceivably real yet invisible barriers that still exist which exhibit that as a society, we are content with very low levels of leadership by women in business as well as politics.

In India as well, the statistics are dismal. While female representation in India in senior management rose to 8.5% in 2019 from about 6% in 2016, we rank third-lowest in Asia-Pacific countries (at 2%) in CEO representation, as well as second lowest rank for female CFO representation at 1%.

Compulsory women representation on boards in India – Companies Act & SEBI Provisions

The Companies Act 2013 mandates that a public company or a private company, will be required to appoint at least one woman director if it fulfils any of the following criteria:

    • A listed company whose securities are listed on any stock exchange.
    • A company having paid-up capital of Rupees one hundred crore or more, and a turnover of Rupees three hundred crores or more.
    • All other provisions related to procedures, appointment, tenure and vacancy of women directors are akin to those framed for regular directors.

Talk to Our Legal Experts

SEBI in accordance with the Companies Act made it compulsory in 2014 for all listed companies to appoint at least one woman director. However, it realised that many of the companies started appointing women from promoter families to fulfil this legal requirement. Therefore, it introduced a provision to appoint an ‘independent’ women director, free of bias or a relationship with the promoter group of the company. Despite this, there exist at least 40% listed companies that have not complied with this provision.

Advantages of having women directors on your board

“To call a woman a weaker sex is a libel. If by strength, is meant brute strength, then indeed, women are less brute than men. If by strength is meant moral power, then women are immeasurably superior. Has she not greater intuition, is she not more self-sacrificing, has she not greater powers of endurance and courage?”  – Mahatma Gandhi

  • With more women leaders at the echelons of political decision making and commercial enterprises, the horizons of creativity and innovation can be broadened through diversity.
  • As board decisions become increasingly complex, with economic, financial, political and social problems to consider, having a diverse board with talented women drawn from different spheres is often linked to better performance.
  • More women would help unravel potential to resolve conflicts within boards, bringing a gendered yet unique perspective to board decisions.
  • Legal measures of enhancing women’s participation are essential but not always adequate as they’re forced and artificial. For true equality to exist, having women on board would encourage more women in the workforce and offer opportunities for promotion to higher positions in the workplace hierarchy.
  • Women are also known to bring a more holistic perspective to boardroom environment and work culture, making women at workplace feel safer, ensure better wages, fair recruitment and gender-neutral promotion policies.
  • Women entrepreneurs would help encourage more women, thus leading to better skills, opportunities and employment for everyone. This would not just lead to more inclusivity in participation and decision making in the industrial-world but also promote healthier and cohesive societies, as envisaged by the Sustainable Development Goal 9.
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Avani Mishra is a graduate in law from the National Law Institute University, Bhopal. She qualified the Company Secretary course with an All India Rank 1 and is a recipient of the President’s Gold Medal for her academic distinctions. She also holds a B.Com degree with a specialization in Corporate Affairs and Administration.