Change the Leadership Style – Are you still caught up in the struggle to find a woman director on board? Then you must pay heed to the fact that the companies with female CEOs find it much easier to comply with regulatory requirement aimed at maintaining the gender balance and promoting diversity in the boardroom.
As per the ETIG data gathered, about two-third of the 17 companies with woman CEOs on the BSE 500, have women directors. The examples of such companies are Axis Bank, Apollo Hospitals, Biocon and Jindal Saw.
“However, on the contrary only 25% of BSE 500 companies with male CEOs have more than one woman on the board. Whereas in the case of Nifty 50 companies run by male CEOs, only 22% have more than one woman on the board.” However, there are exceptions such as Cipla BSE 1.32 % and UltraTech Cement BSE 0.24 % with male CEOs, which have three and four women directors respectively.
“Women CEOs show an enlightened attitude to boards and promoters. A greater gender diversity at board level is a desirable outcome for companies and businesses,” said Arun Duggal, chairman, ICRA. As per Arun Duggal’s point of view who is an experienced independent director and mentor, there should be at least 2 women on corporate boards. Of the two, one should be an independent director. “One woman on the board puts a lot of unfair pressure. One more person will reduce that pressure,” he added.
“Being an individual from a different background isolates the person from the rest of the group. That issue of singling out goes away if we have more than one woman on board.”
However, there is a huge gap at the top where 3 in every 100 CEOs are women in India. Since October 2014, SEBI, in compliance with Companies Act 2013, made it mandatory to have at least one woman on board. However, this could not stop the struggle for many companies including several public sector companies to meet the norm. India’s most profitable public sector company, ONGC is one such example. The present scenario however, is not too bad. We do have a small pool of talent which includes names such as Kalpana Morparia, Falguni Nayar, Naina Lal Kidwai, Renu Karnad and Shyamala Gopinath – all of whom held top notch jobs and had long professional careers. These names are of the most popular women directors in India Inc. This implies that last few years have seen some progress. Moreover, more than one woman director have been appointed by many companies where some were drawn from the family of the promoter itself.
“In my experience of working with women CEOs in pursuing the gender inclusion agenda, I find that they are the first to espouse the cause of greater inclusion,” said Saundarya Rajesh, founder and president at Avtar Career Creators and Flexi Careers India and an expert on gender diversity. “They take a personal interest, they drive programmes and they are deeply invested in the process.”
The most important part is that they take a personal interest and look forward to make a difference. They bring a different mindset to the boardroom which is one of their biggest asset.
“Women bring in unique skillsets to the table and it is imperative for companies to understand the business case of diversity at the top level,” said Samina Vaziralli, executive director, Cipla. “Women are aggregators and try to break the silos.”
“Cipla has three women on its board, including Vaziralli, niece of Cipla chairman YK Hamied and global head for strategy, M&A and new ventures. Punita Lal and Naina Lal Kidwai are the two non-executive independent directors on the Cipla board.”
At international level, there is an example of Norway that mandated to have at least 40% women as board members and many of the European countries that are are moving toward at least 25% of board members being women. These companies are convinced about having more than one woman on board and thus promote and support gender diversity.
“Even in a tradition-bound country such as Japan, where few women enter the top echelons of management, there is a move to have at least one woman board member”, said Duggal.
“Women board members add to the effectiveness of the boards and improve the quality of discussions and decisions,” he said.