Skip to main content

No Independent Woman Director at 40% of NSE Cos

No Independent Woman Director at 40% of NSE Cos
Uday Kotak panel says cos should have at least one independent woman member on their board.Nearly 40% of the companies listed on the National Stock Exchange will have to appoint a woman independent director if the recommendations of the Uday Kotak-led Sebi panel on corporate governance were to be implemented.Data from Prime Database show that among the 1,670 companies listed on the NSE, as many as 637 do not have a woman independent director on their boards.

A Securities and Exchange Board of India panel last week recommended inclusion of at least one “independent“ woman director at all listed companies.
Earlier, the Companies Act of 2013 mandated a certain class of companies to have at least one woman director on board. Sebi, in compliance with the Companies Act 2013, made it compulsory to have at least one woman on a board from October 2014. Many companies inducted a woman member from their promoter families to the board to meet the requirement.
Ever since, there has been a view to specifically mention the word “independent“ while mandating gender diversity , so that woman directors get appointed beyond the promoter family and it does not turn into a tick-box exercise.Corporate governance experts said it is a common misconception that there is a dearth of independent woman talent for boards.They view the recommendation as a positive step in ensuring independence in gender diversity .

“The pool of woman independent directors has been growing to be quite broad and availability of high quality woman directors is not an issue,“ said Arun Duggal, co-founder of Women on Corporate Boards mentorship programme and chairman of ICRA.Sebi chairman Ajay Tyagi said in May that the market regulator would examine whether the requirement for Indian companies to have at least one woman on board should specify that it should be an independent director. Independence of directors is a serious issue, he had said, speaking at the NSE auditorium.
“It is a very difficult issue and various other regulators including the government have to be brought in. We are committed to dig deeper into this issue,“ he had said.Interestingly, the ministry of corporate affairs has opposed some of the recommendations made by the Sebi committee last week, including the one on independent woman director, on the grounds that they concern matters already covered by the Companies Act.

The more than 600 vacant positions might not find all well-known board-experienced and board-ready women, but there are enough women in corporate echelons who can be given first-time opportunity to join boards and that is how the pool can be widened, said experts.“They have to be given a chance.Board decorum is not rocket science,“ said Pranav Haldea, managing director at the PRIME Database Group.

“There are enough capable women who could easily join boards of several Indian companies. What is needed is intent of the promoters to get women as independent directors on board.Now, companies will have to comply and have a woman independent director, which would be good for corporate governance in Indian companies,“ said Rajesh Narain Gupta, managing partner, SNG & Partner.

Several women in second-rung executive roles coached for board positions through various programmes find it tough to get a berth on top company boards. Top companies either opt for women from among family and friends or prefer well-known names -the likes of Ireena Vittal, Manisha Girotra of Moelis, Kalpana Morparia of JP Morgan and Falguni Nayar of Nykaa.com. “Most companies do not support fresh faces on board. It is a real tragedy in corporate India where there is an old women's club when it comes to board,“ said Poonam Barua, CEO of The Forum for Women in Leadership (WILL Forum), which has certified 300 women for boards through its board capability programme in the last two years.

Female representation in the NIFTY 500, which was at 5% as on March 31, 2012, has increased to 13% as on March 31, 2017, according to a recent study by the Women on Corporate Boards Mentorship Program, Institutional Investor Advisory Services and PRIME Database.

However, at 13%, women are still under represented in board roles despite constituting a significant portion of the talent pool in corporate India. This is much lower than countries like Norway (39%), France (34%), the UK (23%) and the US (21%). Only 26 boards among the NIFTY 500 companies had three or more woman directors on March 31, 2017. As many as 15 companies had no female representation on their boards among Nifty 500, compared with only six companies in the S&P 500 index on March 31, 2017, the study showed.

“It's more than just compliance as several studies have shown that having women on the board not only helps with diversity but also has a positive impact on the culture and dynamics in the boardroom,“ said Sai Venkateshwaran, head-accounting advisory services, KPMG in India. It's also seen that the role of these directors is much more effective when there are two or more women on a board, he said
The Economic Times, New Delhi,10th October 2017

Comments

Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

New money laundering norms stump jewellery sector

New money laundering norms stump jewellery sector Dealers with turnover of Rs 2 crore and above covered; industry says threshold too low The central government has notified the money laundering rules for the gems and jewellery sector with immediate effect. Now, any entity deals in precious metals, precious stones, or other high-value goods and has a turnover of Rs 2 crore or more in a financial year will be covered under the Prevention of Money Laundering Act, 2002 (PMLA, 2002). The limit of Rs 2 crore would be calculated on the basis of the previous year’s turnover, said the notification. The directorate general of goods and service tax intelligence has been appointed under the Act. Sources said the government’s move to apply the PMLA to the jewellery sector was a fallout of income-tax raids on jewellers soon after demonetisation last November, when it was found that they sold gold and jewellery at a huge premium and accepted old currency notes as payment. The notification, issued on Augus…

Confusion over branded food GST

Confusion over branded food GST The GST Council's statement over the weekend on applying tax on branded food items has left most of the trade confused.

Even though the Council has not changed the rates on food -0 per cent on unbranded stuff and 5 per cent on brands -many small traders who didn't levy GST earlier said they could come under the 5 per cent slab after the clarification.

While they predicted some increase in consumer prices, large players said they can absorb GST in many ways and keep prices steady.

"Trade is confused and hence on behalf of our chamber, we have asked our members to go ahead and charge 5 per cent GST," said Sushil Sureka, general secretary of the Ahilya Chamber of Commerce and Industry in Indore.

The statement clarifying the application of GST came after some businesses were found deregistering their brands and selling under corporate brand name without paying tax, after the Council exempted unbranded food from the new all-encompassing indirec…