Increased female MBA graduates and changed norms but are women in corporate world fairing well?

The glass ceiling is far from being broken but is showing some serious cracks. Has a new day finally arrived for women in corporate world? Let’s take a moment and consider the changes that are being made by the educational institutions, companies, and other authorities to give more opportunities to the women. If we talk about India, IIM Rohtak has a record percentage of 69% women in its current batch. In line with the trend, IIM Kozhikode too had seen a great response from the women application with 52% of the fresh batch being females. Women’s education for the privileged section of the society has always seen the sun shine as compared to the rural bylanes of the country. But these percentages are a promising indicator to what can be expected from women in corporate world. 

Though the outlook of educational institutions has improved, it is important to consider if this change has occurred in the corporate world as well. The regulations have actively improved the gender diversity in the boardrooms but we still have a long way to go. Recently it was announced by Goldman Sachs that they will underwrite the Initial Public Offerings for only those companies that have at least one diverse member in 2020 and two diverse members by 2021. The reason for this decision is that the IPOs that had women on the board showed better performance when compared to those without a woman member. This is one move that doesn’t merely follow the need to be gender diverse but gives due credit to women in corporate world, making the move substantial and not a superficial one. 

The present scenario

For every company, gender diversity is a priority but it has not been easy to break the glass ceiling. There is a rise in women representation in the boardroom majorly in the developed countries which have been the result of quotas. In India too, gender diversity is being promoted through rules and regulations and as a result, the women percentage on the Nifty 500 companies board has become 17% in the past six years. This looks like a great development but the glass ceiling is still present. In more than half of the Nifty 500 companies, there is only one woman director which hints that this move has been the result of the law and not a change in the mindset.

Arundhati Bhattacharya, the former SBI chairperson and presently the chairperson and CEO of Salesforce India stated that though there is an increase in the number of women Directors and representation of women in corporate world, it is still not sufficient. There are majorly two reasons for this. First is the networking, which women lack but it is very important as usually Directors are recommended through these networks only. Secondly, there are not many C-Suite level women which boards insist upon. Though the government has been introducing these lags, it is disappointing to see that many PSUs do not meet gender diversity criteria.

Directorship share

The rise in women directorship indicates that the regulation has played an important role in making boards diverse. When the Companies Act made it compulsory to have at least one woman director, companies were in a hurry to meet the deadline of April 1, 2014. In response to the mandate, women's participation was almost double but the presence was limited. Many companies decided to onboard daughters and wives of promoters. This made SEBI change the rules again wherein they made it mandatory for the top 500 and 1000 listed companies to have at least one independent woman director.

The count 

The representation of women in corporate world is improving but even today there is only one woman director in more than half of the Nifty 50 companies. Out of 491 companies, only 18 had women chairpersons on 30 March 2020. About 44% of Nifty 500 companies have two or more women directors on their boards. Companies like Apollo Hospitals, Godrej Agrovet, India Cements, and Godrej Consumer products have five women directors each.

Directorship division

If we look at the sector-wise division, it can be seen that in PSUs female representation is at 11% while MNCs have a share of 19% which is the highest. If we take a look at 13 companies that do not have women directors on the board, 12 are PSUs and out of 71 PSUs in S&P BSE 500, there are just eight whose boards comprise more than 20% women. The share of women workforce is higher in the IT and financial sectors, categories like healthcare, consumer staples, and reality show a higher women representation.

Classification of directorship

On March 30, 2020, there were 777 women directors and out of them, nearly 71% are independent directors. Usually, the companies in the promoter group outshine the companies in the non-promoter group with higher women representation in the non-executive and executive roles. This shows that women in corporate world still have a goal not achieved. For better women representation, there should be an increase in women directors from non-promoter backgrounds. 

Board committees

There is a rise in women representation in committees like Nomination & Remuneration, Audit and Stakeholder Relationship, etc which indicates that women are now being recognized, and getting an opportunity to share their viewpoints on matters is crucial for a company. Though women have entered the boardroom of companies they are usually younger in an age when compared to men and hold the position for a shorter duration of time. 

Let us put a bow on it or should we?

Gender diversity in the boardroom has improved due to rules and regulations and mandatory positions created. This situation will improve further if there is an increase in skilled and knowledgeable women in the corporate world. For this, companies should start initiatives to develop the talent pool. Women representation in the boardroom still has a long way to go but with an increased effort by government, authorities, and the companies, it will soon become a reality. Until then let’s hope that B-Schools keep up the trend and keep up the intake of a diverse batch.

Source: https://economictimes.indiatimes.com/