Women Director and Corporate Board: A Brief Analysis

“Are there enough qualified, competent and skilled women directors available to substantially increase the representation of women on boards”. Women have proved competence, appropriateness and trust around the world as fortune Indian companies which have made their position on global fortune 500 companies has women directors on the board.

There has been considerable progress in terms of benchmarking across an escalating number of countries. Policies vary from overt and blatant intervention, such as the quotas in Norway, to a conscious nonintervention approach, such as the US. Governments monitor the discharge and efficacy of diversity policies and practices, using robust research results to design interventions.

Probing that women on corporate boards are a predominant tool, not only for making an academic contribution, but also to impart the basis for reorientation, not just for a more equitable, but also for more potent and vigorous gender representation at the decision-making levels of the corporate world.

Their individuality is a reflection of their perspectives and characteristics that have an impact on corporate boards at micro, meso, and macro levels: individual, board, firm, and industry/environment. Women in Managerial Position have to lead to a civilized society where values, principles and most importantly human beings are given the deserved respect and appreciation rather than running the business mechanically, they are run with the sentiment of the people working for the organization.

In times of this pandemic, it has been proved as most of the countries having women as their administrators can get away from this pandemic and have declared themselves as corona free.

Within the social psychology literature, a principal facet of interpersonal influence is ingratiatory behaviour to augment one’s attractiveness and gain favour with others. It has been observed that women tend to have higher education in every field including management.

SEBI constituted the Kumar Mangalam Birla Committee in 2000 to recommend nature of additional clause 49 of the listing agreement whether fully or partially mandatory or discretionary. This Committee on Corporate Governance emphasized that strong Corporate Governance is indispensable to a resilient and vibrant instrument of investor protection.

It becomes ironical when we study the impact of Women Director on Corporate Governance when the appointment of Women Director on Board itself is one way of achieving Corporate Governance in its true letter and spirit.

Why quota for women director on the board is a fail?

There were two reasons for the failure of this Legislation, loopholes uncovered are mentioned below

1.) The overlap between the same women serving on multiple boards.

2.) Appointment of women from kith & kin relation.

Nada Shousha, Senior Regional Advisor, International Finance Corporation (IFC) (a member of the World Bank Group) and Vice-Chair, the Egyptian American Enterprise Fund have tried to fill the lacuna created by the first loophole by paving a way for more women to enter into the field. She enumerated two ways:

Firstly, we need to awaken consciousness for gender diversity on boards. The numbers leave us undoubted about the role played by female directors for the bottom line. It needs to be acknowledged.

Secondly, women and their allies need to engage with male leaders to gain their support for better gender balance throughout the workforce, including in management. Conferences held for the empowerment of women shall be accompanied by both the genders to make it effective. Future female leaders through training and mentoring can be empowered.

To overcome the second loophole where first is still adamant, SEBI issued circular to appoint at least one independent women director by March 2020. Greater involvement of women results in a broader perspective on the crisis and paves the way for the deployment of richer and more complete solutions than if they had been imagined by a homogenous group. Companies with a higher number of women Director have better Profitability, Return Ratios and Valuations