While a majority of listed companies have appointed family members to fulfill the Securities and Exchange Board of India (SEBI) directive to appoint a woman director on companies’ board, a study of top 200 compaines listed on Bombay Stock Exchange show a different trend.
The list of BSE 200 companies shows that while 96 companies already had woman directors on their board, 80 companies made fresh appointments since SEBI’s directive last year in Febraury. Out of this 80 appointments there are only 7 who are from promoter family.
However, what is most surprising is that out of the 80 new appointments, 51 women are becoming a board director for the first time showing an expansion of such a talent pool. Out of this 51 first time directors there are only 5 from promoter family and the rest are outsiders, showing a thorough exercise done by companies to find out women professionals of calibre.
“Large companies would usually be more conscious of their image and even if women family members are in a position to contribute on the board, perhaps they would not want that situation, and ideally, they will look for independent professional women directors,” says Ketan Dalal, managing partner (West) at PwC.
The list of first timers include former member of International Finance Corporation management group, Farida Khambata, who has joined the board of Kotak Mahindra Bank, besides business historian Gita Pirmal who has joined the board of Bajaj Auto.
A study done by Delhi based financial services firm Prime Database shows a different trend when it tracks the sample of about 1478 companies listed on National Stock Exchange. There were 987 companies who did not have woman director when the SEBI announced its directive last year and 674 out of them have complied with the rule since then. And out of these appointments a majority are from the promoter family.
“Large companies have greater presence of institutional investors hence their corporate governance requriements are more stringent and it shows investor push in selecting valuable candidates,” says Pranav Haldia, managing director at Prime Database.
However, there is a flip side of the story too which makes woman hesitant to join smaller companies. The new Companies Act 2013 has made the duties and liabilities of the director much more stringent, hence woman professionals are more cautious in their selection and have preference for large companies with robust practices for corporate governance.
“From the perspective of woman directors it is understandable why they are more selective in joining companies,” says Amit Tandon, co-founder at proxy advisory firm Institutional Investor Advisory Services. “They need the comfort especially when they are joinig a company’s board for the first time and large well governed companies offer the same,” he says.
|Those in BSE 200 who could not find talent beyond family|
|Company||Director||Date of appointment|
|AIA ENGINEERING LTD.||MS.KHUSHALI BHADRESH SHAH||07-Nov-2014|
|ASIAN PAINTS LTD.||MS.AMRITA AMAR VAKIL||14-May-2014|
|JUST DIAL LTD.||MS.ANITA MANI||24-Sep-2014|
|MPHASIS LTD.||MS.MARY TERESA HASSETT||30-Sep-2014|
|MRF LTD.||DR.(MS.) CIBI MAMMEN||12-Feb-2015|
|RELIANCE INDUSTRIES LTD.||MS.NITA MUKESH AMBANI||18-Jun-2014|
|TVS MOTOR CO.LTD.||DR.(MS.) LAKSHMI VENU||10-Sep-2014|
Compiled by Business Standard