Pratit 15P159Ashwin 15P164
Shanmuganandam 15P169VInith Vemana 15P177
Ronak Batra 15FPM1082015
Women in Board Room-India, US
Managerial Communication
ContentsEXECUTIVE SUMMARY.................................................................................................................................2
INTRODUCTION...........................................................................................................................................3
PURPOSE.....................................................................................................................................................5
SCOPE..........................................................................................................................................................7
METHODOLOGY...........................................................................................................................................8
LIMITATIONS...............................................................................................................................................9
ASSUMPTIONS.............................................................................................................................................9
Importance of Women in Corporate governance and general trends in the US boards............................10
Women Directors Make a Difference........................................................................................................11
Impact on Corporate Governance.............................................................................................................13
Finding Qualified Women..........................................................................................................................13
General trends in the US boards:..............................................................................................................15
INDIAN LAWS.............................................................................................................................................18
Companies Act 2013..............................................................................................................................18
INDIAN WOMEN LABOUR FORCE..............................................................................................................19
More Women Work in Rural India than in Cities...................................................................................19
The Gender Pay Wage Gap is shrinking in India.....................................................................................19
India's Labor Force Is Growing...............................................................................................................19
REPRESENTATION BY GENDER AT ALL LEVELS...........................................................................................20
INDIAN BOARDROOM............................................................................................................................20
IMPACT OF NEW LAW...........................................................................................................................20
INVISIBLE AND UNRECOGNISED............................................................................................................21
UNTAPPED TALENT................................................................................................................................22
INDIA INC STARTS GROOMING WOMEN FOR BOARDROOM ROLES......................................................22
INDIA.........................................................................................................................................................24
US..............................................................................................................................................................25
CONCLUSION and RECOMMENDATION.....................................................................................................28
EXECUTIVE SUMMARY
The modern world has been trying to herald women as independent and free being who has
become or atleast is becoming increasingly "on it's own" In different spheres of life, including
the public, political and economic. But this doesn't make the truth less evident. Women's
participation in "man's world" has been the focal point of many debates and it is still not
arguably satisfactory to say that women are being given a fair play chance. Looking at the
corporate scenario of world economies, it becomes clear that women's participation in top
leadership positions and boardrooms is still at ground zero level. How many women directors
or CEOs does the world know? Certainly not many. Despite having proved their worth in
bringing significant contribution to the bottom line productivity of the company and made more
stable, reliable and profitable decisions for company's good interests; women (wherever they
are made part of the director's board) are not appreciated completely.
In this report, we have tried looking at the corporate scenario in two big economies of the
world, US and India, and try to gauge the current corporate practices with respect to women's
participation in boardrooms. We have explored the idea of bringing gender equality for the
higher goal of good governance, which is way more important than the superficial
implementation of gender equality but is also not possible without having a significant number
of women on directors' board of a company. Given that only 5% of US Public companies have
women on directors' board and India incorporating the new law in 2013 as per which each
enlisted company needs to have at least one women director on board, it seems women's
participation still has a really road towards achieving gender equality in boardrooms.
This report investigates the various conditions that have slowed down this progress and
conditions that can really accelerate the same in these two economies. We have further tried to
analyse how gender equality is a step towards achieving boardroom diversity that has been
considered extremely important for successful perpetuation of business. One might come to
believe that gender equality is being advertised for the sake doing good to women community
but there is more to it than meets the eye.
The repory outlines the predictions and suggestions made with respect to women's
participation and good corporate governance, which are definitely not absolute because of the
limitations attached to the topic. Our purpose is not just to research and present a case for
increasing women's participation for the diversity's sake but also to underline the undermining
of the value of the notion of diversity as an important perpetrator of success.
INTRODUCTION
Since it has been long debated as to how the diversity of executive and non-exclusive directors
in the board room of the corporate houses can be multiplied, gender has been thought as a
solution to this predicament. The perspective behind arguing for the need for diversity in the
board room comes from the fact that diverse backgrounds, perspectives and experiences can
be harnessed for improving the functionality of the board, by enabling them to view a problem
with multiple viewpoints.
With bringing in Gender in the equation, it is clear that the quota of women board directors had
to be sorted next. The jurisdictions of several countries have taken steps, both big and small, in
this direction for encouraging women participation in board room of the corporates. Whatever
the size and number of these steps may be, but the agenda behind them remains more
powerful which is to bring in more women employees into the management roles at leading
public companies. And this new age organizational set up is leading the way to openness and
diversity in thought as far as the decision making is concerned.
Jane Diplock, a director sitting on boards of more than one company including Singapore
Exchange Limited and Australian Financial Services Group Pty Limited, has said that "My own
view is that business should see at this issue is no longer about equal opportunity, or even
merely a matter of choice. It is clearly a matter of good governance." The workplace equality in
terms of gender has largely been driven by the arguments for equal opportunities and
promotions based on merit; but the last century did not see much change in terms of women
employees in the decision making positions.
Since merit involves making significant contribution towards bottom line productivity, several of
the recent studies have revealed that there is a direct correlation between the number of
women directors on board and the bottom line productivity. It is a direct positive correlation
which implies increase in financial bottom line with respect to increase in women board of
directors. But companies across the globe were not convinced and challenged the causation
which slowed the process of change in the gender ration of board members.
Now more and more governments are changing their perspective on the issue, perhaps due to
rising pressure for increasing productivity, and setting up new benchmark for bringing in more
women directors on board. Quotas are being set to include women directors such as Malaysia
announcing 30% of the directors to be comprised of women members in listed companies
within next 5 years. But it is important to remember that while dealing quota implementations,
it can be a tricky decision to make regarding the various recruitment that may take place
consequently.
There is always a fear that it may lead to under-qualified employments and in order to tackle
this fear, one must realise that the compulsion of quotas should be more diligently
implemented. It should only be imposed where absolutely necessary. This is in keeping with the
view that the larger goal is that of good governance and not just random gender equality
quality. Gender equality, without a doubt, will be greatly beneficial to those who adopt it and if
adopted healthily then might also erase the need to impose quotas. The diversity in knowledge
and expertise that gets added as a result of gender equality are invaluable to any corporation
looking to increase productivity in an on-going competitive world economy.
Another managing director, Liselott Kilaas, says "In essence, the scope of the board's oversight
has increased significantly. Further the processes by which the oversight is being excercised
have become better defined and more rigorous. All of this requires a broader skillet and wider
perspective in the board. Again, there is implied need for more board diversity." It is needless
to say that a woman director on board will definitely have a different opinions than a man
director because both comes from different backgrounds of experience and hence process
information differently. This naturally implies more number of perspectives upon a situation.
Since good corporate governance cannot be achieved unless decisions are made after weighing
in all possible and diverse perspectives which are effectively needed to make more balanced
and successful decisions.
Furthermore, how can a company add more diversity to its boardrooms and increase good
governance if it keeps going back to the same source of talent? Looking up potential and
qualified women directors can dramatically change the atmosphere of a company and also its
profits. Women should also come forward and show interest in sitting at the board of a
company whereby they can contribute and as well as gain more insight and expertise by adding
in and taking back more enriching perspectives. This seems to be a great way of ensuring
gender equality and good governance in corporations.
PURPOSE
The purpose of this report is to analyse the demographics of corporate arena in USA and India
with respect to women's participation in the director's board/top management. The purpose of
studying the participation of women directors on board of companies is to reveal the how much
the trend has evolved over time and over different demographics; and further how much is still
left to be done before a certain gender parity can be achieved. The entire debate of 'women on
board' started with the idea of good governance which is invariably linked with the idea of
board diversity resulting from gender equality. Having a fair number of women on the board of
directors and also other executive/non executive roles in corporations cam ensure greater
bottom line finances, better return on investments and better decision making. But despite
these and many more benefits that accompany women participation in board rooms, we don't
witness much turnover of the measures taken for the same.
The Deloitt report "Women in the boardroom: A Global Perspective" outlines the efforts of 49
countries to increase the number of women occupying board seats. It stated that the European
countries continue to lead on gender diversity in the boardroom, with Norway, France, Sweden
and Italy all ranking high on the list of encouraging women participation. Whereas, countries in
the Americas and Asia Pacific region have made least progress in this regard. According to the
report the regional breakdown of women chairs is something like: EMEA- 5 percent, the
Americas- 4 percent and Asia-Pacific- 4 percent.
It seems quite awful to know that women hold only 9.5% of all board seats at 200 leading
Indian companies listed on the Bombay Stock Exchange. In complete contrast to this scenario in
Asia's third largest economy, is the European counterpart Norway, which has the best
boardroom gender ratio with nearly one in three corporate director being a woman. In the US,
even though women have outnumbered men on college campuses, in earning a third of law
degrees and medical degrees and, also in earning undergraduate business degrees since 2002;
they have not moved up to positions of power at the level that they should have been.
Therefore the purpose of this report is to understand the reasons behind this disparity between
men and women in positions of power in corporations and analyze the measures taken to clear
this gap that has been in existence for too long. The idea is to research upon the apparent
progress that countries like the US (the developed) and India (the developing) have been
making towards gender equality in the boardroom and how each has different regulations
regarding the subject. The purpose of this report is also to understand the delays in progress of
getting more "women on board" despite the regulations that have been put into
implementation mode and how far is their scope of success in doing the same.
SCOPE
When one considers gender equality as a means of increasing boardroom diversity and
perspectives and further contribute to and implement good corporate governance, it is
necessary to keep in mind that women are under represented at the board level in most global
economies. A report titled 'Women on Boards: a Policy, Process and Implementation Roadmap'
by law firm Khaitan & Co in association with Biz Divas, a national network of professional
women stated that amongst the 1470 public listed companies in India, the number of women
directors on board were 350, representing a meagre percentage of 4% of the total number of
Independent directors on Board.
Unlike Norway, France and Italy who have made Women on board a compulsory requirement,
some of the largest economies like US, China and Japan have no quotas for women in
boardrooms. Norway has witnessed women representation in boards shoot up from 7% (2003)
to 41% (2013). Norway's implementation could only be made successful by posing serious
penalty for non-compliance as grave as dissolution which is not the case with other countries.
Other countries that have not implemented penalties have seen far less results with the worse
of scenarios being of those like US where there is no regulation in the first place to have women
on board. This is the reason behind the slow rate of growth in terms of women's participation in
boardrooms in countries like US, China and Japan.
India has also recently joined the bandwagon of countries like Norway by enacting the New
Companies Act 2013, replacing the old 1956 Law. The objective of the Act is to bring more
accountability and robust corporate governance by bringing in more women on board. The New
Act requires every listed company and every public company - with a minimum paid up share
capital of Rs 100 crore or an annual turnover of at least Rs 300 crore, to appoint atleast one
woman director. The New Companies Act has already initiated changes in the corporate board
rooms in India. In four-and-a-half months since the SEBI board meeting in February, 2014, 91
women had been appointed to 97 directorship positions in 94 companies (as of 30th June
2014). India may well be a good success story for the other developing countries, and possibly
to developed ones too like the US, if the it is able to demonstrate an actual change in the
women representation on board as well as their presence in senior leadership scene.
The scope of this study and analysis of women representation on corporate boards in two
different economies will reveal to us the intricacies of the ground level changes needed to
speed up the process of bringing more women to perform top leadership roles in corporations.
The scope can be as vast as possible therefore to facilitate a human understanding only two
economies have been chosen for study. This might not be an all encompassing view but it can
be of great value as far as insight into the process and workings of gender equality on board
and good governance are concerned.
METHODOLOGY
The methodology involves the study of all this data collected and analysed for the purpose of
gaining an insight into how to implement good corporate governance by infusing diversity of
perspectives and knowledge and experience in boardrooms through introducing gender
equality.
The methodology of studying the demographics of the corporate centric in US and India
included looking at the various trends in women's participation on board and the various
regulations or conditions that gave rise to these trends. The reasons behind the slow or fast
rate increase in the number of women on board, wherever applicable respectively.
LIMITATIONS
The methodology undertaken while preparing this report was based upon the information and
data collected through various sources like the journals, online sources, research reports
conducted by variousorganisations in the field of women's participation in boardrooms. This
implies that it is not feasible to consider the corporate scenario in every country across the
globe and hence our choice of only two economies, US and India.
Furthermore the only limitation is not just the physical feasibility of the research conducted but
also the psychological set up of people belonging to different cultures regarding gender roles
and how they are perceived. In some cases, data may not be accurate or reliable for predicting
a 'trend' because there may not be enough history attached to it. Even the discourse of
Feminism talks about the various lapses in the history of women's emancipation and women's
participation in the public space, be it political, economic or social. These lapses are similar to
the lapses in the corporate history of women's participation and make it extremely difficult to
draw definite conclusions or make definite predictions.
ASSUMPTIONS
There are certain assumptions which work as fundamentals or entry points upon which a
research is undertaken and the assumptions on which the research on women's participation in
boardrooms are undertaken (which have also been a part of this research) are:
Any research initiated into probing the trends in the corporate houses with respect to
women's participation can not be materialised without paying attention to the long
history of gender bias that has always prevented women from entering the so called
"man's world". The stereotypes about women being "unfit" for performing certain roles,
particularly top leadership roles, is not new in the corporate culture. It is an assumption
that can not be ignored because it is the very fundamental prejudice posing a hurdle in
women's climb up the corporate ladder.
Another major assumption or prejudice that has become the stereotypical behavioural
norm is women's "natural" preference for domestic affairs over and above their
professional affairs. Despite the proven fact of increase in bottom line financial
productivity being in direct correlation with increased number of women directors on
board, this assumption is still prevelant. Women have proven, irrespective of their rare
participation, that they are completely capable of balancing both domestic and
professional matters with equal diligence.
Importance of Women in Corporate governance and general trends
in the US boards
Corporate governance reform has been a hot topic for a number of years. Congress, the
Securities and Exchange Commission, the media, and large shareholders have been pressuring
corporations to improve their governance. In the face of the public failure of companies such as
Enron and WorldCom, some boards have been accused of being asleep or at least acquiescent,
often focusing on short-term earnings and permitting runaway CEO compensation. While many
companies are demanding more competent directors, the traditional pool of directors is no
longer adequate to meet the need for independent, outside board members required by
Sarbanes-Oxley and other reform guidelines – particularly since CEOs are limiting the number of
boards on which they serve. Nominating committees and search firms are enlarging the scope
of their search for qualified directors and dipping into new pools of candidates, including
women. Yet some of the largest companies still have no women directors, and of those that do,
only a small percentage have more than two women directors. The most recent Catalyst report
(2005 Catalyst Census of Women Board Directors of the Fortune 500) indicated that women
held only 14.7 percent of all Fortune 500 board seats. Among the Fortune 500 companies, 53
still had no women on their boards, 182 had one woman, 189 had two, and only 76 had three
or more women directors.
Does it matter to corporate governance whether women serve on a board or not? If so, does it
make a difference how many women serve? Is there a critical mass that can bring significant
change to the boardroom and improve corporate governance?
Based on interviews and discussions with 50 women directors, 12 CEOs, and seven corporate
secretaries from Fortune 1000 companies, we have tried to show that a critical mass of three or
more women can cause a fundamental change in the boardroom and enhance corporate
governance.
Our study extends current research and writing on corporate governance, particularly work that
draws attention to the importance of boardroom behavior and dynamics. In addition to
employing critical mass theory, we build on research on minority and majority influence on
group decision-making as well as tokenism theories.
Women Directors Make a Difference
We find that women do make a difference in the boardroom. Women bring a collaborative
leadership style that benefits boardroom dynamics by increasing the amount of listening, social
support, and win-win problem-solving. Although women are often collaborative leaders, they do
not shy away from controversial issues. Many of our informants believe that women are more
likely than men to ask tough questions and demand direct and detailed answers. Women also
bring new issues and perspectives to the table, broadening the content of boardroom discussions
to include the perspectives of multiple stakeholders. Women of color add perspectives that
broaden boardroom discussions even further. The number of women on a board makes a
difference. While a lone woman can and often does make substantial contributions, and two
women are generally more powerful than one, increasing the number of women to three or more
enhances the likelihood that women’s voices and ideas are heard and that boardroom dynamics
change substantially. Women who have served alone and those who have observed the situation
report experiences of lone women not being listened to, being excluded from socializing and
even from some decision-making discussions, being made to feel their views represent a
“woman’s point of view,” and being subject to inappropriate behaviors that indicate male
directors notice their gender more than their individual contributions.
Adding a second woman clearly helps. When two women sit on a board, they tend to feel more
comfortable than one does alone. Each woman can assure that the other is heard, not always by
agreeing with her, but rather, by picking up on the topics she raises and encouraging the group to
process them fully. Two women together can develop strategies for raising difficult and
controversial issues in a way that makes other board members pay attention. But with two
women, women and men are still aware of gender in ways that can keep the women from
working together as effectively as they might, and the men from benefiting from their
contributions.
The magic seems to occur when three or more women serve on a board together. Suddenly
having women in the room becomes a normal state of affairs. No longer does any one woman
represent the “woman’s point of view,” because the women express different views and often
disagree with each other. Women start being treated as individuals with different personalities,
styles, and interests. Women’s tendencies to be more collaborative but also to be more active in
asking questions and raising different issues start to become the boardroom norm. We find that
having three or more women on a board can create a critical mass where women are no longer
seen as outsiders and are able to influence the content and process of board discussions more
substantially.
Impact on Corporate Governance
Having a critical mass of women directors is good for corporate governance in at least three
ways.
• The content of boardroom discussion is more likely to include the perspectives of the multiple
stakeholders who affect and are affected by company performance, not only shareholders but
also employees, customers, suppliers, and the community at large.
• Difficult issues and problems are considerably less likely to be ignored or brushed aside, which
results in better decision-making.
• The boardroom dynamic is more open and collaborative, which helps management hear the
board’s concerns and take them to heart without defensiveness.
Finding Qualified Women
Are there enough qualified women available to substantially increase the representation of
women on Fortune 1000 boards without sacrificing the quality of decision-making? If being a
Fortune 1000 CEO is a prime qualification – as it has been often in the past – the answer is No,
because few Fortune 1000 companies are led by women. But being a CEO isn’t critical for all
board members. In fact, many white men on these boards don’t meet that qualification.
Although our respondents consider it important to have some CEOs on a board, they see no
reason why all board members must be CEOs and some good reasons why not all members
should be CEOs. Indeed, because women tend to bring new perspectives, a new and desirable
leadership style, and a willingness to tackle tough issues, they arguably have more of what it
takes to contribute to boards than some CEOs, whom our respondents see as having more narrow
views and sometimes being more willing to smooth-over tough issues than to process them fully.
Male CEOs looking for board candidates may still be drawn to men with whom they are
comfortable and with whom they socialize, but some CEOs themselves recognize that that is not
necessarily good for corporate governance.
Our respondents were adamant that women should not be brought on as tokens simply because
they are women. To serve boards well, women need high-level corporate experience or the
knowledge, skills, and abilities needed to contribute to board discussions. Although boards may
have to reach a bit deeper into the senior-management ranks to find more women, women who
have succeeded in business careers in corporate America are eminently qualified to contribute to
these boards – as are successful women entrepreneurs, lawyers, nonprofit executives,
consultants, and academics.
To improve board governance, our research shows that boards should actively seek qualified
women board members and not be satisfied with just one or two women on their boards.
Nominating committees should not try to be “gender-blind.” Rather they should consider
increasing the number of women an important part of their role and should insist that search
firms bring them diverse slates of candidates that always include qualified women. Since
corporations say they value “outside the box” thinking, they need to look outside the box to
recruit women, who bring a new perspective and style that enhances the quality of discussions
in the boardroom.
General trends in the US boards:
Increasing board size to add female directors is common:
Women as a percentage of new board members across all companies has increased. And just
about 15% of S&P 1500 companies have increased the number of female-held directorships
since 2013.
However, 51% of the companies that increased directorships held by women last year did so by
increasing board size. This raises questions around whether boards are holistically refreshing or
simply adding more directors to the board.
It also explains why the larger the board size, the more likely it is for the board to include
female directors. Only 54% of S&P 1500 companies with a board size of seven directors have at
least one female director versus 98% for those with 12 directors.
As we can see from the infographic above Women directors as a part of the board members has
been increasing over the years with the general trend being increasing the size of the board to
accommodate the Women directors.
1. Female directors bring different experience to the board:
A review of male and female directors reveals that female directors tend to be younger, less
tenured, and more likely to serve on multiple company boards than their male counterparts.
They are also less likely to be current CEO’s.
2. Gender diversity is rising slowly:
Despite efforts to advance board diversity by institutional investors and other groups, progress
toward gender parity on US boards is minimal. Indeed, the proportion of women on boards has
increased only 5 percentage points over the last 10 years. Only 16% of S&P 1500 boards seats
held by women-less than the proportion of seats held by male directors. 15% of S&P midcap
400 and 12% of S&P SmallCap 600 directorship are held by women
Boards of larger companies are significantly more
gender diverse. While 98% of Fortune 100 companies
have at least one woman on their boards, only two-
thirds of SmallCap companies
INDIAN LAWS
Companies Act 2013
The Companies Act, 2013 was approved in August 2013. The 2013 act was intended to enhance
self-regulation, strengthen board governance, encourage corporate democracy, and reduce the
number of required government approvals.
One of the major goals of the 2013 act is to improve board diversity and to enhance the
responsibilities and accountability of executive directors, managerial personnel, and
independent directors. One of the new requirements pertains to the appointment of women
directors to company boards.
Under section 149(1) of 2013 Company’s Act, the following category of companies need to
comply with the requirement of having at least of one woman
(i) Every listed company, within one year from the commencement of second proviso
to sub-section (1) of section 149
(ii) Every other public company that has paid–up share capital of one hundred crore
rupees or more, or a turnover of three hundred crore rupees or more within three
years from the commencement of second proviso to sub-section (1) of section 149
Companies meeting these criteria are required to comply within one year; newly incorporated
companies meeting the criteria must appoint a woman director within six months of
incorporation. The board is required to fill any vacancy of a board seat previously held by a
female director no later than the next board meeting or three months from the date of such
vacancy, whichever is later.
INDIAN WOMEN LABOUR FORCE
More Women Work in Rural India than in Cities
Overall, the labour force participation rate for women is falling: from 37% in 2004-05 to
29% in 2009-10.
In 2011-2012, women comprised 24.8% of all rural workers, down from 31.8% in 1972-
73.
In 2011-2012, women comprised 14.7% of all urban workers, a small increase from
13.4% in 1972-73.
13.4% of Indian working women have a regular salaried job compared to 21.2% of
working men (aged 15–59).
The Gender Pay Wage Gap is shrinking in India
Women earn 56% of what their male colleagues earn for performing the same work.
The more educated a woman is, the wider the gender pay gap.
The gender pay gap increases as women advance in their careers.
India's Labor Force Is Growing
India will add 110 million people to its labour force in the next 10 years, including youth
and women entering the workforce.
Over the next 40 years, India is projected to add 424 million working-age adults.
If India can increase women's labour force participation by 10 percentage points (68
million more women) by 2025, India could increase its GDP 16%.
REPRESENTATION BY GENDER AT ALL LEVELS
INDIAN BOARDROOM
Women hold only 9.5% of all board seats at 200 leading Indian companies listed on the Bombay
Stock Exchange. Along with Japan and Portugal, Asia’s third largest economy has one of the
lowest percentage share of women directors in the world, according to a report by Catalyst, a
not-for-profit that promotes gender equality in business. The report only analyzed the
composition of BSE 200 companies, and not all listed Indian firms. In Norway, which has the
best boardroom gender ratio, nearly one in three corporate directors is a woman.
In 2013, India enacted a new Companies Act, replacing the original 1956 law. It mandated that
all companies listed on stock exchanges must have at least one woman on its board of
directors. Firms had till October last year to comply with the new norms.
IMPACT OF NEW LAW
A new law may have forced India Inc. to open the boardroom doors to women, but years of
sidelining them has led to a high dropout rate among professionals resulting in a shortage of
women to fill such positions.
Around 530 out of 5,711 listed firms have been fined by the Bombay Stock Exchange for not
having at least one woman director by the deadline. Other companies appointed relatives such
as wives and mothers-in-law who are seen as proxies. Research by Catalyst, a non-profit
focusing on women in business, finds the shortage is due to the fact that far more women drop
out of the corporate workforce early on in India than in other countries.
Catalyst's 2013 report "First Step: India Overview" found that nearly half of Indian women drop
off the corporate employment ladder between junior and mid-levels, compared with 29
percent across Asia as a whole. The main reason cited is the lack of support given to women
who want to return to work after having a baby, such as extended maternity leave, crèche
facilities and flexible hours.
INVISIBLE AND UNRECOGNISED
Studies conducted by Catalyst, Mckinsey, Credit Suisse and others repeatedly show that board
diversity leads to better performance in terms of productivity and profitability. A 2012 report by
the Credit Suisse Research Institute, for example, found that stocks of large cap companies with
at least one woman board director outperformed those with all-male boards by 26 percent
over a period of six years.
Yet, despite increased efforts by companies and governments around the world to lift the
number of women in senior corporate roles, their presence remains stubbornly low. Women
hold just 12 percent of boardroom seats worldwide, and only 4 percent of board chairmen are
women, according to a June report by Deloitte after studying almost 6,000 firms in 49 countries.
In India - despite the prominence of a few businesswomen such as Biocon Managing Director
Kiran Mazumdar-Shaw, ICICI Bank CEO Chanda Kochhar or HSBC country head Naina Lal Kidwai
- the lack of women on boards is even more pronounced. Just 7.7 percent of board seats are
held by women in India, compared with 17.5 percent in South Africa and 15.6 percent in the
United Kingdom, the Deloitte report showed. As in other countries, Indian women climbing the
corporate ladder face the usual unconscious gender biases, being perceived as unambitious,
not capable enough, or misplaced home makers, experts say
UNTAPPED TALENT
Research conducted by Genpact estimates there are 1.5 million qualified Indian women like
Anand, who have dropped out of corporate jobs largely because they cannot find suitable
employment after starting a family.
The Career 2.0. programme, launched on Facebook in May, has resulted in more than 1,000
applications and more than 10 women being hired at middle and senior levels such as assistant
vice president.
Catalyst's Irde says that initiatives like these, together with mentorship programmes and
policies such as child care facilities and flexible working hours, are key to boosting the number
of women breaking through the proverbial glass ceiling.
INDIA INC STARTS GROOMING WOMEN FOR BOARDROOM ROLES
The proportion of women in senior positions has declined in Indian companies. According to a
study by Grant Thornton, the proportion of women in senior positions has fallen from 19 per
cent in 2013 to 14 per cent in 2014. In fact, globally too, the proportion of senior roles filled by
women is 24 per cent, exactly the same proportion as in 2013, 2009 and 2007.
It is only 5 per cent higher than the number recorded 10 years ago, the International Business
Report said. As a result, the study, which has been conducted between November 2013 and
February 2014 by undertaking more than 6,700 interviews, shows that number of Indian
companies supporting quotas for women on executive boards of large listed companies has one
up to 64 per cent against 44 per cent last year. The proportion of senior roles for women stood
at 38 per cent for China, 37 per cent for Eastern Europe and 35 per cent for Southeast Asia.
The report notes that though women are signing up for college in increasing numbers —
globally, the ratio of women to men in tertiary education is 108 to 100 — this doesn’t appear to
be translating into better, or better-paid, jobs for women. One reason for this may be that
women are not studying the subjects that are likely to lead to senior management positions
Naina Lal Kidwai, director, Asia Pacific & Country Head, HSBC India, said, “We can always do
better. Corporate will have to hire more women and give them equal opportunity. Women
don’t want incentives, they want equal opportunity. Having an enabling organization is certainly
something corporate can work on. The promotion to senior position should be on true
meritocracy”.
Kiran Mazumdar Shaw, chief of Biocon, said that women themselves will have to make bold
choices to move up the ladder.
The debate on having women at senior positions has also gained momentum because of the
recent directives from SEBI and the new Companies Act, 2013. With the Companies Act, 2013,
making it mandatory for companies to appoint at least one woman director on their board and
including activities related to promoting gender equality and women empowerment under the
CSR norms, India Inc has woken up to the need of taking women seriously in board rooms. In
fact, many companies have already started work on training women employees for leadership
roles.
Last month, SEBI aligned its norms to the Act, making it compulsory for every listed company to
appoint at least one woman director. The directive comes into force from October 1. According
to indianboards.com, a joint initiative by Prime Database and National Stock Exchange (NSE), as
many as 966 of the 1,456 companies listed on the NSE, do not have a woman director on their
board currently. In fact, accounting regulator Institute of Chartered Accountants of India is
working on creating a pool of trained women chartered accountants for appointment on board
of firms
INDIA
A new law stipulating the mandatory presence of atleast 1 women in the board has forced India
companies to open the boardroom doors to women, but years of side-lining them has led to a
high dropout rate among female professionals resulting in a shortage of women to fill such
positions.
Around 530 out of 5,711 listed firms have been fined by the Bombay Stock Exchange for
not having at least one woman director by the deadline. Other companies appointed
relatives such as wives and mothers-in-law who are seen as proxies.
Research by Catalyst, a non-profit focusing on women in business, finds the shortage is
due to the fact that far more women drop out of the corporate workforce early on in India
than in other countries.
Catalyst's 2013 report "First Step: India Overview" found that nearly half of Indian
women drop off the corporate employment ladder between junior and mid-levels,
compared with 29 percent across Asia as a whole.
The main reason cited is the lack of support given to women who want to return to work
after having a baby, such as extended maternity leave, crèche facilities and flexible hours.
In India - despite the prominence of a few businesswomen such as Biocon Managing
Director Kiran Mazumdar-Shaw, ICICI Bank CEO Chanda Kochhar or HSBC country
head Naina Lal Kidwai - the lack of women on boards is even more pronounced.
Just 7.7 percent of board seats are held by women in India, compared with 17.5 percent in
South Africa, 15.6 percent in the United Kingdom and 12 percent worldwide average.
Indian women climbing the corporate ladder face the usual unconscious gender biases,
being perceived as unambitious, not capable enough, or misplaced home makers.
% Percentage Change
Percentage of women on boards:
India S&P CNX Nifty 50
8.3 2.7 (2012)
Percentage of women on boards 6.7 0.5 (2012)
Percentage of women on boards of
listed companies
9.0 n/a
US
Women in USA make up a majority of the U.S. population. Women are 50.8 percent of the U.S.
population.
They earn almost 60 percent of undergraduate degrees, and 60 percent of all master’s
degrees.
They earn 47 percent of all law degrees, and 48 percent of all medical degrees.
They earn more than 44 percent of master’s degrees in business and management,
including 37 percent of MBAs.
They are 47 percent of the U.S. labor force, and 59 percent of the college-educated,
entry-level workforce
Although they hold almost 52 percent of all professional-level jobs, American women lag
substantially behind men when it comes to their representation in leadership positions:
They are only 14.6 percent of executive officers, 8.1 percent of top earners, and 4.6
percent of Fortune 500 CEOs.
They hold just 16.9 percent of Fortune 500 board seats.
In the financial services industry, they make up 54.2 percent of the labor force, but are
only 12.4 percent of executive officers, and 18.3 percent of board directors. None are
CEOs.
They account for 78.4 percent of the labor force in health care and social assistance but
only 14.6 percent of executive officers and 12.4 percent of board directors. None, again,
are CEOs.
In the legal field, they are 45.4 percent of associates—but only 25 percent of non-equity
partners and 15 percent of equity partners.
In medicine, they comprise 34.3 percent of all physicians and surgeons but only 15.9
percent of medical school deans.
In information technology, they hold only 9 percent of management positions and
account for only 14 percent of senior management positions at Silicon Valley startups.
In recent years, however, the percentage of women in top management positions and on
corporate boards has stalled.
Their presence in top management positions today remains below 9 percent.
The percentage of women on all U.S. corporate boards has been stuck in the 12.1 percent
to 12.3 percent range over the past decade.
At almost 17 percent, women’s representation on Fortune 500 boards is slightly higher,
but it hasn’t budged in eight years.
% Percentage Change
Percentage of women on boards:
S&P 5007
18.7 1.7 (2012)
Percentage of women on boards
(U.S. statistic of the Credit Suisse
Gender 3000, a global population)
13.7 0.4 (2012)
Percentage of S&P 500 companies
with two or more women on the
board
68.0 2.0 (2013)
Percentage of Fortune 250 board
seats held by women
18.5 n/a
Percentage of female directors
elected in the past year at Fortune
250 companies
22.4 4.3
Percentage of boards with up to 25
percent female board members
(sample of 250 public companies)
76.0 6.0 (2012)
Percentage of boards with more
than 26 percent female board
members (sample of 250 public
companies)
24.0 6.0 (2012)
Percentage of boards that have 18.0 3.0 (2012)
increased the number of female
directors serving on the board
(sample of 250 public companies)
Women of color face an even wider gap
The representation of women of color in corporate leadership roles is worse still. Women of
color are 36.3 percent of our nation’s female population and approximately 18 percent of the
entire U.S. population. They make up about one-third of the female workforce.
And yet…
Women of color occupy only 11.9 percent of managerial and professional positions. And
of those women, 5.3 percent are African American, 2.7 percent are Asian American, and
3.9 percent are Latina.
Women of color hold only 3.2 percent of the board seats of Fortune 500 companies.
More than two-thirds of Fortune 500 companies have no women of color as board
directors at all.
Although women in USA have outnumbered men on college campuses since 1988, they have
earned at least a third of law degrees since 1980, were fully a third of medical school students by
1990, and, since 2002, have outnumbered men in earning undergraduate business degrees since
2002, they have not moved up to positions of prominence and power in America at anywhere
near the rate that should have followed.
In a broad range of fields, their presence in top leadership positions—as equity law partners,
medical school deans, and corporate executive officers—remains stuck at a mere 10 percent to
20 percent. Their “share of voice”—the average proportion of their representation on op-ed
pages and corporate boards, as TV pundits, and in Congress—is just 15 percent.
In fact, it’s now estimated that, at the current rate of change, it will take until 2085 for women to
reach parity with men in leadership roles in our country.
CONCLUSION and RECOMMENDATION
Even though the prospects of a women reaching top leadership in the United States of America is
higher than that of India, the overall situation needs to improve drastically for women to have
parity with men.
The organisations have to focus on inclusion at all levels right from the beginning to
ensure that they have a healthy pipeline to move up the ladder.
Questions have been raised as to whether legislation or quotas can be the solution. We
believe board members should be appointed not because of their gender, but their
professional experience, ability, and qualifications.
The female voice is valuable in boardrooms because it supplements discussions with a
different perspective. The same principle may apply to grooming young talent and
building boards with a diversified cultural and ethnic background. These are of special
importance to businesses in the dawn of social media and are essential for sustainable
development.
We need to create an environment that would enable our women to break the glass
ceiling. Stereotypes, bias, and brutally long working hours are discouraging our women
executives from reaching for the top.
We need to provide enough positive reinforcement so that more women will find it
rewarding to make sacrifices for advancement in their careers. These are often tough
personal choices, and smart companies would use them as opportunities to attract and
retain the right professionals instead of driving them away. So we need to be more
innovative and accommodating in terms of employment arrangements to promote
diversity.
Family-friendly policies are crucial so that our female professionals can shine in the
different stages of their lives. By the same token, we need to look seriously within our