Appointment of Director

Women Directors

All women directors are in every industry and should be remarkable examples in order to inspire others. This article is about knowing the rules and regulations to follow within corporate organisations.

Have you ever worked as the women director of a professional organisation? If yes, then this blog is for you! If not, we are sure you must have at least worked for a woman director in your lifetime! To know more about the subject, please read this blog.

Why are Women Directors Required in the First Place?

Since the beginning of time, women have been crucial to the growth and development of the nation. They have handled everything, including operating both the home and the country. Including women in businesses by giving them important positions like a seat on the board of directors was the only thing that was absent. 

The Companies Act of 2013 addressed this scenario. Every corporation is required by this Act’s requirements to designate a woman director, and failure to comply with this requirement is punishable by law.

We first need to comprehend the meaning and scope of corporate governance to grasp the engagement and impact of women in managerial roles on the corporate governance rules of the organisation. Read on to know more!

Corporate Responsibility

An organisation’s operations can be controlled and directed by a collection of laws, customs, or procedures known as corporate governance. Establishing a balance between the interests of the firm and its stakeholders, such as shareholders, management, customers, financiers, the general public, etc., is the goal of corporate governance practice. 

A company’s ethical business practices are ensured through reasonable corporate governance procedures. Accountability, openness, fairness, and responsibility are the four criteria for evaluating corporate governance.

The board of directors, who can make decisions for any firm, are accountable for ensuring solid corporate governance procedures. They have been given the power to decide on all crucial issues regarding the business’s practical operation, expansion, and development. The function of independent directors is vital for corporate governance because they may better align stakeholder interests with the company’s and take an objective view on managerial decisions.

Corporate governance is made up of these four key components. The 4 Ps of corporate power is another name for them. These consist of the following:

  • Purpose

It includes the organisation’s long-term goals, objectives, and justification for existence.

  • People

It consists of all parties involved, such as shareholders, management, clients, financiers, the general public, etc.

  • Process

It consists of how the organisation’s management and operations are carried out.

  • Performance

It consists of the organisation’s effectiveness and its social impact.

Which Organizations Deploy More Women Directors?

As far as the Indian market is concerned, most organisations do not deploy women managers or directors, for that matter of fact! Hardly have we seen women directors dominate a group of employees or get themselves engaged in making a fruitful business decision. 

But, fortunately for women managers, recently, the Indian Government has come up with reservations for women in professionally managed business organisations. Certain NGOs, schools and service-based organisations have already started to accommodate women directors. However, deploying a lady to head your business takes work. The corporate body needs to follow certain norms as laid down by the Government of India. 

Directors And The Company’s Board Of Directors

The term “board of directors” refers to the entire group of the company’s directors, according to Section 2(10) of the Companies Act. A director appointed to a company’s board of directors is what the term “director” means, defined under Section 2(34) of the Companies Act. From reading these two definitions, it is clear that the Companies Act has specified neither the precise meaning nor the extent of either of these terms.

Each Business Must Have A Board Of Directors

Every public company shall have at least three directors on its board, and every private company should have at least two directors on its board, according to Section 149 of the Companies Act. A panel of directors may have up to 15 members in total.

Unbiased Directors

Who are the unbiased directors? Are they independent bodies? Please note that every listed public company must have at least one-third of its independent directors, according to Section 149(4) of the Companies Act. The following requirements must be fulfilled to be appointed as an independent director:

  1. The person should be someone other than the company’s management or full-time director.
  2. The person should be something other than a company promoter.
  3. Neither the person nor their kin should have a financial connection to or interest in the business.
  4. Neither the person in question nor any of their kin should be or have worked for the business.
  5. The applicant must be a trustworthy person.
  6. The person needs to be qualified and experienced in the company’s line of work.

However, although it has been explained above, it is essential to understand that the role of unbiased directors may vary from one organization to the other. You need to refer to the memorandum of articles ( MOA) or the Memorandum of Understanding ( MoU), as stated by the experts.

Obligations Of A Female Director

The general obligations and duties assigned to other directors under Section 166 of the Companies Act are comparable to those of a woman’s appointment of director. Some of the responsibilities are listed below:

  1. The director must conduct themselves by the company’s bylaws
  2. The director should act in the organisation’s and all stakeholders’ best interests
  3. The director must exercise proper caution and diligence in fulfilling their obligations
  4. The director should refrain from attempting to take unfair advantage of their position within the organisation
  5. The director is not allowed to delegate their position to anyone

penalty if a woman director is not appointed within the allotted period

It is important to note that no particular clause specifies repercussions for failing to appoint a woman director. As a result, the chapter’s general criminal provisions will apply in this instance.

According to Section 172 of the Companies Act, any violation of the rules governing the nomination of directors can result in fines of at least 50,000 and up to 5 lakhs being imposed on the business as each officer.


Today’s world is moving away from the traditional patriarchal paradigm. A bold statement in this regard is the inclusion of women in top management, governmental positions, military forces, etc. Women will contribute in a variety of ways to the board. Emotional intelligence, a self-branding mindset, confidence, etc., are all included in this. 

Women’s inclusion advances the idea of gender diversity and paves the road for improved corporate governance. If you are an entrepreneur heading a business, you need to understand the intricacies of deployment, as stated by the Government of India. If you are looking to be deployed in such roles, it is essential to understand the norms associated with the same. Going through the recruitment norms related to women directors might also help you. We suggest you contact Vakilsearch, a reputed legal firm, to assist you regarding the same.

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