The Government has proposed a minimum of one woman director on the board of companies. This will be part of the proposed Companies Bill.
The Union Cabinet is likely to consider the new Bill shortly.
The Prime Minister's Office (PMO) had asked the Corporate Affairs Ministry to ensure the representation of women on company boards in the proposed Companies Bill, 2011. On Friday, the Ministry of Corporate Affairs discussed the proposed Bill internally. According to an official who was present at the meeting, the Corporate Affairs Secretary, Mr Naved Masood, stressed that the Bill was high priority and all efforts should be made to pass it during the winter session of Parliament.
Sources said a specific provision in the Bill says, “Every company shall have a board of directors consisting of only individuals as directors and shall have minimum number of (a) three directors in case of a public company, (b) two directors in case of a private company and (c) one director in case of a one-man company.”
It further says, “Every company shall have a maximum of 15 directors, excluding the director nominated by the lending institutions, which are governed by the special stature, provided that such class or classes of companies as may be prescribed shall have at least one woman director.”
Industry chambers, however, were not impressed by the provision for a woman on the board. They said directors should be appointed on the basis of talent not gender. But the Government ignored their argument.
A senior official said with the Government's focus on empowerment of women, it was necessary to bring in a special provision.
The industry also failed to convince the Government on the maximum number of directors on the boards. They wanted the maximum number at 18, but the Ministry settled for 15.