Women
on Board
Politics of India is treated to
be most complicated one. The essential rule of our constitution is equality
which was hardly seen in India but now things are changing and one such example
is introduction of Women on board. In
the ancient times, Indian women were neglected which can be traced from
practice of child marriage, sati, dowry and female infanticide. These practices
can be stopped only by spreading awareness of women empowerment.
These days, Indian women have
started proving themselves by taking actively participation in the fields of
space, defence, science etc. Corporate sector is one of the fields which are
emerging with involvement of women in other countries but in India, women
participation is only 9.5% as per 2014 catalyst census. Another report by Grant
Thornton, India is again lowest in terms of senior management of women.
This article will review the
participation of ‘’ Women on Board ‘’, by discussing the company’s act 2013, initiative
taken by ICSI, importance of such participation followed by the conclusion.
Companies Act 2013
Companies act 1956 has been
replaced by Companies act 2013 after 56 years. According to Companies act 2013,
as per section 149(1), read with Rule 3 of Companies (Appointment and
Qualification of Directors) deals with women director on Board of the company.
Following companies are required to appoint Minimum One women director -
1. Every listed company and every
other public company having paid up capital of Rs100 core or more,
2. Every listed company having
turnover of Rs 300 crore or more.
Note: Here paid up capital and turnover is as per latest audited
financial statements.
If company is newly incorporated,
then such company is required to comply with this provision within 6 months
from date of incorporation. While for the other companies which are
incorporated under company’s act 1956, these companies will abide within 1 year
from date of incorporation.
In case of Vacancy of women
director, it is required to be fulfill as soon as possible but not later than
next immediate board meeting or after 3 months from date of such vacancy whichever
is late.
Besides all this, there has been
provision inserted by SEBI, involving huge penalties for non compliance of this
Section 149(1).
Initiative taken by Institute of Company Secretary of India
ICSI has asked its members to
comply with the requirement as Company Secretary is accountable for the
compliance and acts like a compliance officer for meeting the provisions of
listing rules. Further, if company has not complied with this provision then
they have to face fines as laid down by the regulators, stock exchange.
The watchdog, Securities and Exchange
Board of India (SEBI) has issued circulars stating companies which do not
comply with this requirement to pay fine which is described as under –
June 2015- Fine is up to Rs 50000
July- September 2015- Fine of Rs 50000
+ Rs1000 per day during which default continues
On or after 10 Oct 2015- Fine is
Rs 142000 + Rs 5000 per day during which default continues.
Also, as per latest report by
Primedatabase, there have been 180 companies which have failed to file such requirement.
Out of which 32 companies are state-owned companies which include SAIL, GAIL,
Punjab National Bank. Before SEBI direction came, 96 companies out of 200
companies of Bombay Stock Exchange already showed that there were women contribution
on board which happened last year in the month of February. Of these
appointments 50 companies have been women director for first time.
The companies which recently
appointed women director on Board as Independent Director include GVK power, Kohinoor
Foods,Adani power, Adani ports and SEZ. Majority of them are chartered
accountant, Banker not only this company like United Breweries Holding Ltd have
appointed foreign national as Women Director. Still there are lot of companies
which need to appoint Women director and according to Biz Divas, nearly
one-third of world’s 200 largest companies have no women Director as per the
report on August 2014.
Importance of participation of Women director
Such participation will create
public image, boosts the gender diversity. Women board directors also broaden a
company’s market knowledge as well as raise its profile.
Additionally return on equity increases with
women contribution and this has been proved by number of great instances like
Chanda Kochar of ICICI bank, Kiran Mazumdar, the director of biocon limited.
Not only this, most recent report of catalyst, ‘’The bottom line Corporate
Performance and women representation on board” which states that Women
participation in fortune 500 companies have high financial position than those
with lowest representation of women on board. Advantage of women in board has
not just come from the fact they are women but also who in particular these
women are so these women must be properly skilled and should have great exposure
to the corporate sector.
It has been seen for the first
time on company’s board that women director is not only of grit and passion but
large pools of talent .One such example is Tata Consultancy Service, India’s
largest software service exporter who appointed Aathi Subramanan as executive
directoron board. Besides this, Anita Goyal of Jet airways, Shivani Singh of
Spicejet is second second domestic carrier to have owner spouse holding on
board. All this shows that business used to play naturally into male mindset
but not anymore.
Experts believe company with
women director deal with risk more efficiently. Besides problems of
shareholders, community, they focus on long term priorities .Also women aid to
develop successful products and deliver good services as they are likely to
become more familiar with need of the customers. After all, in Indian market
the majority of customers for the developing companies like Amazon, Flipkart,
Snapdeal etc are women so it is significant for these companies to alter board
room by appointing dynamic women director as their participation is vital for
decision making.
In addition to this, another
reason having women in senior role includes better listening skill, expressing empathy;
women are natural networkers and in today’s dynamic world social networking are
important aspect for companies to grow.
Moreover, women are multitasking
leading to generate excellent results, women director who tend to be younger
than male director will bring advantage to the company’s board from new ideas
and strategic information. Furthermore, as per American Express, Women have
more patience in today’s business and it is rightly said ‘patience is the key
to successes.
From the above discussion, the
best way to bite bullet is gender diversity which will contribute to corporate
performance ultimately resulting in prosperity of economy. With the Women
participation on board, India’s corporate sector has taken the step forward towards
social change from family of promoter on board. All this is possible through
New Companies Act and this can be attained only with exposure, training and
qualification.
To conclude, Women on Board is a
excellent sign for the expansion of Indian corporate sector leading to
profitability and sustainability.
Article Contributed by MS SAHIBA BIJRAL
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