The recent dispute between corporates and female claimants for seats on the board has propelled the discussion on attitude towards women in business. The conflicts in the Murugappa group’s Ambadi Investments versus Valli Arunachalam and the Hinduja brothers versus Vinoo Hinduja shone a spotlight on the lack of gender parity in corporate governance. The National Stock Exchange database shows that only 2,044 of 11,416 directors and 1,235 of 5,524 independent directors of NSE-listed companies are women. Appalling as this is, 75 NSE-listed companies have no women directors on their board.
Under-representation of women in boardrooms is a global phenomenon and India is no exception. With the odds already stacked against women, structural barriers and orthodoxies impede them from gaining requisite skills, knowledge and experience. Back in 2014, Amazon attempted to develop an AI recruiting tool aimed at eliminating human biases against women in leadership roles. Instead, it started penalizing résumés that mentioned terms analogous to women such as “women’s chess captain” and so on since the algorithm had been developed using the résumés of leaders in the past 15 years, all of them male. All female candidates were thus eliminated. This indicates that the issue is larger than the paternalistic nature of policies. In India, directives and judicial pronouncements have addressed the issues ailing corporate governance.
Section 149(1) of the Companies Act, 2013 mandating one woman director on the board is a progressive stance, but this provision is applicable only to listed and certain public companies. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 has ensured that the one woman director mandate is implemented. As per the Kotak Committee recommendations on corporate governance, Sebi, in May 2018, mandated the appointment of at least one woman “independent” director on the board of top 500 and top 1,000 listed companies. But these directives are not enough to exhaust the patriarchal ecosystem that has pervaded the boardrooms for years.
The quota system has taken the form of tokenism. It has been observed that the women members appointed are generally related to the family of the chairperson or promoters, which stations them as quota fillers. This renders the purpose of including women in the strategic decision-making process a mere box to be ticked. The issue is not limited to mindset, as can be inferred from the 2014 Amazon experiment. Industries which have traditionally been led by men have come to define leadership roles from a masculine perspective. When women in leadership adopt the same perspective and follow their instincts, they are often characterized as “unladylike” and incompetent.
The registrar of companies has called out companies on several instances for failing to appoint a woman director. For instance, in ROC versus M/s Gehna Precious Metals Ltd; Re: ICOMM Tele Ltd; Re: Teamasia Semiconductors (India) Ltd; Re: MB Power (Madhya Pradesh) Ltd; and Re: GTPL Hathway Ltd. Sadly these companies are usually let off with minimal penalties that are nothing but slaps on their wrists. This indicates the frivolous attitude towards provisions of inclusion.
There are numerous examples of women breaking the glass ceiling but there are even more unheard stories of women being restricted by the shackles of stereotypes and mindset. The true implementation of inclusion measures can happen only when leadership roles are redefined in a gender-neutral manner. The need of the hour is to reconsider existing provisions and include all classes of companies in the ambit. Corporate governance policies should not just offer preferential treatment but should become the basis of affirmative action. The onus lies with policymakers, key managerial persons and regulators to formulate policies that engender the spirit of gender egalitarianism in business.
