- Gender diversity on the boards of Indian companies has improved, but India lags behind the global average of 24% female representation in boardrooms.
- However, the rate of growth has slowed over the past three years and slowed to an overall increase of just 1%.
- Of a total of 4,694 board positions in the Nifty500 companies, only 827 positions were held by women at the end of FY22.
Gender diversity on the boards of Indian companies has improved, with women’s representation on the boards of Nifty500 companies nearly tripling from 6% in 2014 to 17.6% by the end of FY22, according to a new report from Institutional Investor Advisory Services (IIAS).
However, the rate of growth has slowed over the past three years, with an overall increase of just 1%, the report said.
Of the 4,694 board positions in the Nifty500 companies, only 827 positions were held by women, representing 17.6% of the total.
The Companies Act 2013 required companies to have at least one female director on their board of directors from April 2014. Previously, the representation of women on the boards of these Nifty500 companies was between 5 and 6%. According to the report, this doubled to 11% in the first year.
While growth was steady over the next few years, the pace slowed in 2019 – Nifty500 companies have increased female representation by just 1% in the three years since.
Under the Companies Act, 2013, any listed or private company or any other public company with a paid-up share capital of at least ₹100 crore or a turnover of at least ₹300 crore must appoint at least one female director.
Furthermore, for listed entities, the SEBI (Listing Obligations and Disclosure Requirements), 2015 mandates the appointment of at least one female director to the board of directors.
Renewal of the board: the termination of the director’s term of office
According to the research, it is not only the growth rate of female board positions that has slowed down. India also lags behind the global average of 24% female representation in boardrooms.
At the current pace, it will take India until 2058 to reach 30% gender diversity on company boards, the report said.
However, there is some cause for optimism ahead, the report notes: “The impending board renewal in 2024, which marks the end of the historic status of the previous tenure of independent directors, presents a unique opportunity to reset the pace of change. .”
Grandfathering is when an old rule continues to apply to some existing situations, in this case to the previous terms of office of independent directors.
Of the 500 companies on the Nifty500, 159 companies had 20% or more female representation on their boards. Further, 48.6% of Nifty500 companies had at least two female directors on their boards of directors, the report said.
However, the situation in public companies is dire, with only 13.54% women on their boards.
|Property||Representation of women|
Source: NSE, Prime Database, IiAS Research, as of March 2022
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