India's Companies Act 2013 mandated the inclusion of at least one female director on corporate boards. However, despite a decade since this mandate, progress towards achieving gender parity at the board level remains slow.
Recent data reveals that, on average, Nifty-500 companies have only one female director, highlighting the challenges of increasing gender diversity in India's corporate leadership. This falls significantly short of international benchmarks and the UK government's goal of achieving 40% female representation on FTSE-350 company boards by 2025.
Out of the Nifty-500, 223 companies, or 45%, have only one female director, as required by law. However, this single mandatory appointment doesn't necessarily translate into greater gender diversity in boardrooms. Large companies are particularly lagging in this regard, with 81 of them having just one female director among ten or more board members.
For instance, Larsen & Toubro (L&T), a prominent Indian multinational, has just one female director on its 19-member board. This underrepresentation persists due to various factors, including boards' tendencies to hire independent directors, who are typically individuals they have prior interactions with and are more likely to be men. As a result, women directors are often appointed primarily due to legal mandates, rather than proactive diversity efforts.
The lack of experienced female directors further complicates the issue. In India, the pool of qualified women willing to take up directorships remains relatively small, and they face hurdles in gaining the necessary board experience.
The study also reveals a disparity in women's representation in senior management. While there have been efforts to improve gender diversity, the majority of organizations report less than 20% female representation at these levels. The study finds that greater female representation occurs when the CEO is directly responsible for diversity and inclusion efforts.
Efforts to achieve gender parity in corporate leadership require greater initiative, both from the government and multinational corporations. The slow progress highlights the need for comprehensive strategies to promote diversity and inclusivity in boardrooms, beyond mere compliance with legal mandates.
