SEBI order on women directors: few comply in letter and spirit

From appointing family members to seeking more time, corporates have used every trick in the book to blunt SEBI’s order requiring them to have at least one woman on their board.

Despite a six-month deadline extension and SEBI threatening to impose a penalty of up to ₹25 crore, 180 of the 1,456 companies listed on the NSE have not complied with the requirement yet, according to Prime Database. And it’s not because there aren’t enough women eligible to fill the vacant seats at corporate boardrooms across the country.

The real issue is that companies have restricted their search to a small group within the corporate world instead of broadening it to eligible candidates from other sectors. For example, in developed markets such as the US and the UK, the trend of appointing professors and academicians on boards is quite common.

Rajiv Burman, founder of Lighthouse Partners, a human resource consultancy firm, said, “Many women in India tend to take up jobs related to education. Other sectors that are heavily dominated by women these days are the social sector (like with NGOs) and journalism. So far, Indian companies have not looked at these sectors seriously.”

Others reckon that companies have been plain lazy. Pranav Haldea, Managing Director, Prime Database, said the requirement was simple and companies were given 14 months to comply. “Many companies got around this by appointing family members to the board. That some of them still failed to do even this shows callousness on their part and scant respect for the law.”

Interestingly, the Government itself has been lazy about compliance. Data show that 32 of the 180 NSE companies that haven’t complied are PSUs, where the Government is responsible for appointing directors.

According to Prime Database, 832 women have been appointed to 912 directorship positions in 872 companies since SEBI’s diktat in February last year. Of these, 114 directorship positions have been filled by family members of the promoter group. These include top corporate brands such as Reliance Industries, Raymond, McNally Bharat Engineering, TVS Motor, Videocon Industries, JK Tyres, Mangalore Chemicals and Asian Paints.

JN Gupta, Managing Director, Stakeholders Empowerment Services, believes it’s a myth that competent women directors are not available. “There is a problem when companies appoint family members of the promoter group as their women representative on the board. It doesn’t comply with the spirit of the law.”

Moorthy K Uppaluri, CEO, Randstad India, said sometimes the problem is also sector-specific. For example, he said, the auto sector and heavy engineering are heavily male-dominated, so finding women at senior management positions is difficult.

Neera Saggi, the only woman to be appointed President of the Bombay Chamber of Commerce in its 178-year history and currently a member on several boards, said corporate India doesn’t need more than 2,000 women to comply with the law. “But companies need to do is be as fair and broadminded in appointing women directors as they are in appointing men.”