Gender parity in the boardroom still a distant dream

If you thought India’s decision to mandate having one woman member on the board of every company put the nation on the fast track to achieve gender parity in the boardroom, think again.

While more women occupy board seats in India Inc today than in 2014, when the Companies Act 2013 made that compulsory, structural barriers and unconscious bias have made achieving gender parity in the boardroom an elusive dream in India.

“Having women on board started off more as a checklist after the policy mandate,” said Janet Paul, Director, Human Resources, Asia Pacific and Japan (APJ) & Middle East, Securonix.

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Women’s board representation in India has risen to 18 per cent in 2022 from 6 per cent in 2013, according to Ernst & Young. However, that is well below the global average which Deloitte pegs at 20 per cent and the numbers in countries such as France, Italy, Sweden, Britain and the US. While 95 per cent of the NIFTY 500 companies have a woman on their board, less than 5 per cent have female chairpersons.

Need more women on top

India’s most diverse boards tend to be found at companies with women chief executive officers (CEOs) or chairs, according to the EY report.

“A man leading the company thinks of bringing a man on the board,” said Uma Reddy, a member of the Women Entrepreneurs Association. “To think of a woman doesn’t come so quickly.”

There is also a perception problem, with women largely seen as a better fit for corporate services rather than core executive roles, said Paul. Additionally, there is a significantly less number of women recognised as potential board members as compared to men.

Life sciences (24 per cent) , media and entertainment (23 per cent), consumer goods (20 per cent) and information technology (20 per cent) have emerged as leaders when it comes to gender diversity in boards, the EY report said, citing the trend between 2017 and 2022. Banking, financial services and insurance (BFSI) and energy and utilities sectors have lagged on that front.

With 50 per cent of users of all services and consumable products being women, adding them to boards has shown to improve companies’ financial performance. Having women on boards could also help in boosting the companies’ stock prices and scores on the corporate governance and innovation fronts, EY pointed out.

Challenges

It is not just about filling those board seats with the right candidates.

“The bigger question is not just in having a seat at the boardroom but how much of your voice is being heard that will influence the high-stakes decisions being taken there,” said Smita Khanna, Chief Operating Officer, Newton Consulting India.

Also, many women leave the workforce after five to seven years and do not return, EY said. Equally competent women managers progress slowly in their careers compared with men due to lack of mentors, unequal opportunities, gender bias at the workplace and the pressure to manage responsibilities both at work and home, experts pointed out.

Adequate representation of women in the leadership positions is an issue, explained Sachin Paranjape, Partner, Deloitte India.

India will need to significantly increase the number of women executives to see a rise in the representation of women in boardrooms, he pointed out.

“India now has a pool of proficient women professionals who could be potential women board

members but unfortunately several of them do not even get considered for board positions,” said Aashish Kasad, Senior Partner & India Region Diversity, and Inclusiveness Business Sponsor, EY India. “This is because there aren’t adequate databases that bring together these profiles of candidates for board positions evaluation.”

Experts said there was a critical need to do more.

“What will work in India is a push-pull mechanism where companies make active efforts to foster an enabling environment and promote diversity at all levels of the organisation, and a self-push from women to prioritise their career and not feel guilty about it,” said Reddy.