NEW DELHI :
The gender gap in the Indian corporate sector is high among the top positions, but the situation is better off among independent directors and is improving, the ministry of corporate affairs (MCA) has said in a monthly review, urging that diversity in boardroom has to top the corporate agenda.
As of October-end, about 5,000 women independent directors have been registered in the country, accounting for nearly a fourth (23.6%) of all independent directors registered in the country, said Rajesh Verma, secretary in the ministry, in the monthly review. However, the share of women in senior and managerial positions remains low at 14.6% of these positions. Also, there are only 8.9% of firms with female top managers, the review pointed out, quoting the World Economic Forum’s global gender gap report 2021 brought out in March.
Bridging the gender gap is the need of the hour, but it should be complemented by giving women the desired job profile, ensuring work-life balance, giving a safe working environment and, most importantly, changing mindsets, Verma said in the review.
“Diversity in the boardroom should be a priority and at the top of the corporate agenda. A prerequisite for the board of directors should be to treat diversity as an imperative and not just as a compliance with laws,” the review said.
The dearth of talent may not be a reason behind this gap and the lack of access to the right opportunity at the right time may be a more fitting explanation, said Prashant Mehra, partner and chief operating officer at Grant Thornton Bharat.
“Prior to the pandemic, the work culture was very rigid and non-flexible and organizations rarely made exceptions when one needed them to. This led to some talented individuals resigning from their jobs to cater to other critical tasks. Another issue could be the lack of support on the personal front, because leadership positions require a lot of time, effort, and attention,” said Mehra.
The Companies Act, 2013, mandates that a company should have at least one woman director on its board, a key contributor to improvements made in gender disparity in recent years. The ministry’s idea is to advocate greater participation in corporate leadership but there is no plan to reserve a larger share of boardroom directorships by legislation at the moment. The government has given a signal by mandating at least one woman director on the board and it is for businesses to act on that signal proactively to ensure gender equality, a person familiar with the government’s thinking said on condition of anonymity.
“Our society has to evolve and understand that a woman can ace any and all roles that she puts her mind to. The least one can do is make the journey less chaotic for them,” Mehra said.
The review said the number of women directors, including nominee and whole-time directors, on the boards of companies saw an increase from 266,361 in 2014 to 298,923 in 2020 after the Companies Act got notified in 2013. In the case of key managerial personnel of companies, which includes managers, chief executives and chief financial officers, women representation improved from 272,974 in 2014 to 306,376 in 2020, the review pointed out.
Increasing gender participation at all levels and at the same time creating a conducive feedback mechanism in the organization can help improve the ratio of women in leadership roles, Mehra said.
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