Silicon Valley has recently gotten some unwanted media attention for the technology industry’s lack of diversity in their workforce composition. India has had a similar legacy of not having many women participating at the corporate board level. Thanks to government intervention, that situation has changed. In 2013, Indian companies were told in no uncertain terms by their Government to ensure that they have at least one woman on their board of directors within 12 months. Many ended up having a mother or a sister or a wife appointed to the board, while some others ignored the matter and pushed it to the back burner. The deadline for the appointment, originally set for Oct 31, 2014, was extended to March 31, 2015. 88% of Indian companies complied in time, while more were scrambling to obey on the very last day. Those who did not manage to do so will now pay the stipulated monetary penalty for non-compliance.
Banking in India has seen a lot of women succeed. According to Business Today, banks headed by powerful women control 45 percent of all of India’s public sector bank deposits and 50 percent of all loans. Some industry watchers have attributed this success to women possessing a superior combination of sound instinct and intellectual capability to analyze businesses. In addition, that financial services sector rarely involves heavy physical labor or schedules that conflict with family responsibilities. Indian women are definitely making their mark by breaking the glass ceilings in state-owned banks, investment firms and financial services. But, most women find themselves on the boards of companies only when they are promoted by themselves or their male family members. They have not reached a stage where their growth will continue unhindered without such initiatives from the government.
Why have Women on a Corporate Board?
The logic behind the requirement to have a female Corporate Director is simple. It also goes beyond the normal considerations like ensuring the rights, emancipation and equality of women in society. In an admittedly patriarchal society like India, where an educated (non-working) mother is supposed to be the most qualified person to bring up a child, this requirement can be expected to bring great change in the long-term.
Changing the Status Quo
This table represents the share of women on company boards around the world. Norway has been leading with women holding 35.5% of board seats.
Until now, in Asia, only Japan at 3.1% was behind India’s 9.5% of board positions for women. However, the equations have altered completely and now India at 99% (or a close 100%) will be at the head of this table at the next reckoning – and we shall wait to see how competitive the rest of the world gets to equal or overtake them. We shall also be watching to see if it is sustainable – will the Indian government remain vigilant long enough for male executives to overcome their biases and recognize the benefits of female board members? Or, will companies slowly and quietly return to their old ways?
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