What is holding back corporates from hiring more women on their boards
Several companies have taken to appointing family members to fill the requirement of having at least one woman on a board
By Sharanya Dutta
There are simply not enough women on the boards of companies. ‘The CS Gender 3000: The Reward for Change’, a new report by Credit Suisse that came out in September 2016, mapped 27,000 senior managers at about 3,000 large companies globally.
According to the report’s findings in India, the percentage of women on boards has increased by merely one percentage point from 2014-2015, and the management diversity has actually dropped from 7.8 percent to 7.2 percent from 2014 to 2016. Reportage on this, however, in articles such as this one, or this one, are celebrating the fact that it has doubled (5.5 percent to 11.2 percent) in the last six years, which is a strangely optimistic way to present this data.
In September, Veerappa Moily, former Corporate Affairs minister, said to the Hindustan Times, “There is [a] shortage of professional women directors qualified for the job.” But is this really the case? He also said, “The Ministry of Corporate Affairs should take positive measures, including preparing a list of qualified women professionals who could be appointed on board[s].”
The thing is, these lists do exist.
FICCI Ladies’ Organisation (FLO) has a list of about 150 women since they began compiling it in 2014-2015, but the idea isn’t to place them: the onus lies with the women to promote themselves fairly aggressively. FLO conducts several sessions and workshops, some of which are to train women who are already on boards.
Biz Divas Foundation, which helps promote gender inclusivity in the recruitment process of organisations, has a Women on Boards network. It is a directory of qualified women either already on boards or aspiring to be on them, all with over 20 years of work experience at top levels, who want to be part of board rooms.
Biz Divas has been compiling this pool for five months now, and it currently has about 150 women on this growing list, which they intend to circulate among companies in the near future. Only around 10 percent of the women on this list are on boards already.
The 2013 Companies Act by the Securities and Exchange Board of India (Sebi) mandated that all listed companies have at least one woman director on their Board of Directors by 31 March 2015. So why is it that even after nearly two years and a deadline extension of six months and the threat of a hefty fine — of Rs 1,42,000 for non-compliance after the deadline of 1 October 2015, and a daily fine of Rs 5,000 per day of non-compliance thereafter — the number of companies without a woman director is still at 61?
We know that there are unfair assumptions about women in senior positions of management (take the myth of the catty woman), but new data based on studies conducted on companies in the US disprove some of these. For instance, there is the assumption that even if women do get on boards, they will bare claws and get territorial as hell. A mid-year report by 2020 Women on Boards, also in the US, demolished the myth of ‘Queen Bee syndrome’ and found that companies with women in leadership positions like CEOs or Board Chairs were likely to include more women. A Credit Suisse report published in September 2014 found that companies with women on their boards showed better financial performance.
Ranjana Deopa, Co-Founder at Altavis & Biz Divas Foundation, says that recruitment of women to corporations in India lacks a proper structure — “Women are recruited by word of mouth, they don’t even have headhunters.” Their own list is compiled through women they meet at Biz Divas’ events and their networks. From these, the women who are already on boards mentor the others in various programmes that they coordinate.
In a survey of around 200 women, Biz Divas came out with a ‘Women on Boards Refresher Report 2016’, in which 90 percent said they aspired to be on boards. Many of these women said they would rather serve on boards of not-for-profit organisations or start-ups before entering the corporate world, and the report suggests this might be because traditional industries are more difficult to enter because of dated norms and stereotypes.
Deopa says that many companies she has spoken to have not wanted to add more women to their boards after they met the one-woman mandate. Several companies have taken to appointing family members to fill the requirement of having at least one woman on a board. Ranjana Agarwal, who was the president of FLO in 2010 and is on six boards (only one of which has another woman), believes that this is acceptable, as long as they are trained afterwards. She says, “It is a progressive move, because now they consider women in the family as legitimate candidates.”
Gagan Singh, the only woman on the boards of Timex and Future Retail, says, “If the woman is qualified, like Nita Ambani, for instance, it is a legitimate appointment. The important question to consider is, ‘Do they have a voice?’ Appointing a woman just for compliance is utterly unproductive.”
The problem, Agarwal says, is that while women are competent, they don’t network like men do, and remain invisible. “So even if you put them on a list, unless promoters meet and interact with them, they’ll never be considered for boards,” she explains.
The Biz Divas report also identifies the problem of talent sourcing, and offers solutions such as sponsorship by existing board members, creating separate lists of qualified women by neutral bodies, quota allocation, methods to retain women employees, and special training on developing networking skills. While these are pertinent methods for building a larger pool of visible women for the task, the question is why, when there are obviously women who are qualified for these positions at the moment, they must jump through the impossible hoops to get on a board, while men don’t.
We can dispel all the myths about incompetent women in an environment where you’re damned if you do and damned if you don’t, and wave list after list of competent candidates in companies' faces. And if they're still refusing to hire more women (or even the one woman that is ‘mandatory’) on boards, they’re fast running out of excuses.
(The Ladies Finger (TLF) is a leading online women’s magazine delivering fresh and witty perspectives on politics, culture, health, sex, work and everything in between.)