Seat at the table: How women have entered corporate boardrooms and carved out a space for themselves

Nearly a decade since it was mandated that India Inc. open its boardrooms to women, they have got their foot in the door. But there is still plenty of room to create a healthy gender balance in letter and spirit

Several years ago, corporate veteran Arun Duggal was part of a board discussion to consider firing an otherwise thoroughly professional company secretary who had made a grave error. While the board was focussed on the severity of the mistake, Duggal recalls its only woman director pointing out: How can you punish a person for making an honest mistake that any one of us could have made? “She went a step further and said, ‘Have you considered how terrible he must be feeling? We should tell him it was a mistake that embarrassed us. But it happens, so let us move on’,” says the Chairman of ratings agency ICRA, who is a former CEO of Bank of America, India.

Duggal—who co-founded industry body Ficci’s Women on Corporate Boards programme with Avaana Capital’s Founding Partner Anjali Bansal to identify and mentor high-potential women for board positions through one-on-one mentorships—says the discussions are always richer when women are on the board. Mark Mobius, the guru of emerging market investing, agrees. “I don’t care what the sector is; it is good to have a woman on the board. More than that, maybe the chairperson as a woman… I really think that women directors are very important to a company,” he says. “The decisions are more balanced. There is more empathy in difficult situations,” adds Duggal, as he lists out more than half a dozen traits that make women valuable additions to the board.

"Companies need to realise that younger women have a lot to offer as directors. We who are senior women on boards should also encourage boards to appoint younger women as directors"

Pallavi Shroff
Managing Partner
Shardul Amarchand Mangaldas & Co

But why should including more women on boards come with specific benefits any more than with men? With women accounting for half the world’s population and half the customer base of most companies, it should be but natural for the top body to be representative, say experts. India’s current and first full-time woman Finance Minister, Nirmala Sitharaman, had put it emphatically: “We are not asking for inclusivity. We are not asking for gender parity. You want more profit, get me in.” Sitharaman said this at a women directors’ conclave in Mumbai in September 2022, referring to data showing that companies with women on their boards turned in more profits.

In the nearly 10 years since markets regulator the Securities and Exchange Board of India (Sebi) made it compulsory for listed companies—subject to certain criteria—to have at least one woman director on their board, the needle is surely and steadily moving. An EY report from October 2022 shows that women’s representation on Indian corporate boards has tripled from 6 per cent in 2013 to 18 per cent in 2022. As per primeinfobase’s analysis of Nifty 500 companies, the absolute number of women directors in India has more than doubled since 2015, after the Sebi guidelines became effective. But a closer look reveals that the country is still some distance away from going beyond checking the boxes.

Lone Woman Directors

For starters, several boards have a lone woman director because of companies sticking to the bare minimum mandated by law. EY data shows that about 60 per cent of the Nifty 500 companies have just one woman board member, while less than 5 per cent of the companies have women as chairpersons. Only nine of the Nifty 500 companies have 50 per cent women’s representation, per primeinfobase.

Vinita Bali, former MD & CEO of Britannia Industries, who has worked extensively with listed companies in India and overseas in executive and independent director positions, says she initially found herself to be the lone woman independent director in boardrooms. “But that has changed. I guess it is also partly a reflection of the boards I have been on in India such as Titan, CRISIL, Syngene—all companies that believe in diversity beyond gender.”

The situation in India, despite its ‘golden skirts’—a term coined to refer to the same small set of distinguished women who get circulated across multiple board positions—is not as bad as it is in Norway, where women are known to hold 25-35 directorships each. And one needs to thank the Companies Act, 2013, for this, as the law caps the maximum number of directorships any person can hold at a given time at 10 in listed companies and 20 if it is expanded to all companies. But it is still quite concentrated in India where 605 women hold the 803 board positions in Nifty 500 firms, per the 2022 EY report. Incidentally, the Companies Act made it mandatory for certain firms to have at least one woman on their boards.

"There is enough and more evidence to say that to really make a big difference, you need at least two to three women on the board. Otherwise, the voice of a single woman gets drowned"

Vinita Bali
Former Md & Ceo
Britannia Industries

Pallavi Shroff, Managing Partner of legal firm Shardul Amarchand Mangaldas, agrees that this indeed is the case. With five directorships, she is among the women directors with the maximum number of board representations in Nifty 500 companies. “It is not correct. Companies need to realise that younger women have a lot to offer as directors,” she says, adding that the onus is also on senior women board members to encourage boards to appoint newcomers. Radhika Gupta, MD & CEO of Edelweiss Asset Management, says it is perhaps easy to default to a few tried and tested names. “We would probably do a better job at widening the net (of women in the workforce) rather than just the boards because finally boards play an advisory and oversight role,” says Gupta.

Sumit Agrawal, Founder, Regstreet Law Advisors

According to Preetha Reddy, Vice Chairperson of Apollo Hospitals Enterprise, the judicious selection of board members stands not only as a matter of prudent practice, but also as a safeguard against multifaceted challenges. With four sisters involved in the business, women hold six of Apollo’s 11 board positions—which is among the highest in India. “Our boardroom is just one of the areas with high women’s representation, and we have seen its benefits across the spectrum—from well-rounded and informed decision-making to a deeper understanding of the needs of our customers, as well as better talent attraction and retention,” she says.

Where are the Women?

At the other end of the spectrum, companies pay lip service by including extremely young and inexperienced women. Neharika Vohra, Professor of Organisational Behaviour at IIM Ahmedabad—who has researched women on boards—says her research showed that there were firms with B.Com graduates in their mid-twenties as independent directors. “You are just putting her there so that she has no voice. She’s so inexperienced that she is possibly just happy to have the position, but has nothing to contribute and is not a threat either,” says Vohra. Bali adds that it cannot be assumed that every company really wants a culture of transparency and candour. “If a company’s culture is that the Chairman decides and all other directors generally agree, then there is no independent perspective on those boards.”

A common retort is that the available pool of women to choose from is too small. But it is just a question of enlarging the roster by looking beyond just those with prior CEO experience. There is a rich universe of non-CEO executives, retired IAS officers, retired PSU officials and academics waiting to be tapped. “Of course, relevant experience matters. But that can be found in functional expertise in the C-suite as well,” says Bali. “Companies can hire technical experts. But effective board members are there for their broad wisdom of corporate strategy, human motivations, service to society and looking after the customer interests,” adds Duggal.

A lot boils down to how companies approach board member selection—which is typically through references in India. “All my overseas boards have been the result of a professional search process that the respective companies have undertaken to refresh their boards. In India, there is still a lot of who the Chairman knows and wants on the board,” says Bali. “Companies advertise for all other important positions. Have you ever seen any advertisement for board positions seeking talent from the open market?” asks Manoj K. Raut, CEO & Secretary General of the Institute of Directors, India. The organisation trains, certifies, and mentors directors, and helps them get empanelled on different boards.

Vohra of IIMA, who serves as independent director herself and trains corporates in leadership, says an Indian board places a premium on knowing the person being selected because they are trusted with all kinds of information. “It is seen as a high cost to the company when the woman being selected is unknown to their network. That is why so few women keep getting circulated around boards.” When that is the case, how much meaningful contribution can the person in question make for the company’s growth and strategy? Very little, says Raut. “Once you are on the board, you will be on several committees. And those meetings can go on for long. Nothing can be finalised overnight.”

Speaking of committees, women board members are traditionally limited to leadership positions in Grievance and CSR committees, while the Nomination and Remuneration Committee (NRC) and Audit Committee, which are perceived as important, are customarily reserved for men. But here, too, the EY report shows an improvement of 5-6 percentage points to 16-18 per cent representation across the Nifty 500 companies as of 2020. “I do see companies appointing women to nomination & remuneration committees, but their appointment to audit committees may not be very frequent,” says Shroff. “The reality is that a lot of the women selected for board positions are not with that kind of audit expertise,” says Vohra. Raut adds that women would benefit from acquiring a basic understanding of the balance sheet and sustainable investment planning.

The Way Forward

Networking is one of the best ways for women to get into more boards. That’s how the men do it, say experts. These days, several networks run workshops, mentor women and enable their board placements. Raut says women’s participation in his organisation’s programmes has risen steadily over the past four to five years, with 25 per cent of every batch now being women. Speaking strictly about professional board appointments, Bali has a different view. “If we are selecting members based on competence, there is no reason why first-time women directors need to undergo special training which their male counterparts don’t need to.”

But what really helps women to be more effective board members is critical mass. “There is enough and more evidence to say that to really make a big difference, you need at least two to three women on the board. Otherwise, the voice of a single woman gets drowned,” says Bali. Duggal agrees. “A quarter to 33 per cent of your board has to be women directors to enhance the impact of having women on them.”

He sees the jump from the current 18 per cent representation to 25 per cent as being crucial. “Once that happens, it will become automatic (where it starts becoming the norm to have more women on company boards).” Along the way, sensitisation of the small and big things is much needed. For instance, Vohra points out, the standard issue green-notary stamp still says ‘Chairman’ and not ‘Chairperson’. “We should have fixed it by now. Every time I get such a paper, I replace ‘Chairman’ with ‘Chairperson’ and then sign.”

Sumit Agrawal, Founder of Regstreet Law Advisors, points out that the mandatory provisions of the Companies Act and Sebi Regulations are catalysts for change in the boardroom, much like the evolution of family laws regarding women’s succession and property rights with help from the Supreme Court. “Perhaps, it is time to extend the mandate to all listed companies, moving beyond the Top 1,000, and enforce it rigorously against those who don’t comply,” says the former Sebi officer.

While the Sebi rule has ushered in quantitative change, experts agree that there is only so much the law can fix where intent is lacking. Again, the Finance Minister had minced no words last September when she said it was ultimately up to the corporates to open up their boardrooms. “The industry will have to take the lead. The government cannot do any more nudging. It cannot be breathing down on behalf of 50 per cent of the population. The pressure, reasoning, and building of a greater sense of conscious decision-making have to come from society to push this agenda,” she had said.

With that, the ball is now firmly in the court of India Inc.’s boardrooms to not just comply in letter, but also be more welcoming in spirit. Duggal is hopeful: “The rule is only 10 years old. Give it another 10 years and we won’t even have to talk about the gender composition of boards. There may even be boards with women chairs and a majority of women directors.”

Amen to that.