At least one female director please!

On Women's Day, the Government thought it would do its bit for women which at first blush might appear to be tokenism. Taking a small cue from Norway which mandates a 40 oer cent reservation for females on the boards of companies, the Ministry of Corporate Affairs has decided to provide vide the Companies Bill, 2009 before Parliament that a public company having at least five directors should have at least one woman director.

No big deal, one would say. But already there are murmurs of protest. How can a company with substantial foreign participation be told to accommodate a woman on the board? Isn't it a premature move? These and other questions in a similar vein have been doing the rounds ever since the proposal was mooted.

The Women's Reservation Bill providing for one third reservation for women in elected bodies including Parliament has been hanging fire for a very long time, with each party blaming others for the impasse. In the rarefied corporate board rooms, the proposed director's name has to be approved by the general body normally with a simple majority unless the company's articles insist on a special resolution. In the event, getting a director elected has never been a serious challenge if he has got the backing of the promoter group and others carrying voting clout. One, therefore, wonders what the fuss is all about, especially when jumbo boards are de rigueur .

The remonstrations about non-availability of suitable women candidates do not cut much ice given the fact that board rooms are not invariably packed with brilliant menfolk. Many owe their positions to extraneous considerations, sometimes bordering on the frivolous. Even assuming that the representation to women on boards could be just ornamental, there is nothing wrong with it.

Different perspectives

Men are from Mars and women are from Venus. They bring a refreshingly different perspective to a problem or agenda on hand. Board proceedings tend to be more decorous, less raucous, less bawdy and more focused thanks to feminine presence. At any rate, what the MCA is proposing is not a one fifth representation on boards for females. In a jumbo board of say 20, onewould do. There is a view, cynical as it is, that when a woman sarpanch of a panchayat can be manipulated by her husband or other patriarchs in the family, a woman member on the board of directors too could be. This is not a valid counter at all for statutory female representation. Aren't there instances of ‘beholden' male directors chiming agreement with their benefactors almost as a reflex action? Stakeholder representation is not alien to company managements. Lenders give themselves a berth by writing a covenant to that effect in the loan agreement. Employees' interest is watched over by an employee director in many countries. Private equity investors keep a hawkish vigil on their investments by their intrusive presence on the boards of companies they have invested in. Would it then be wrong to acknowledge the demographic reality that in India females are in as much numbers as males if only to send out the message that chivalry is more than a platitude?

It has been found that countries countries where women come out of their closets and rub shoulders with men find greater happiness and gender harmony and neutrality. In the event, the MCA's move is more than symbolic.

(The author is a Bangalore-based chartered accountant.)