I t’s a landmark move. Following changes in India’s Companies Act, the Securities Exchange Board of India has mandated that by October 1, the board of every listed company should have at least one female director.
Research by Indianboards.com, conducted last year, a joint initiative of Prime Database and the National Stock Exchange (NSE), found that roughly two-third of Indian companies (966 out of the 1,456 NSE-listed entities) do not have female directors.
Referring to data from executive search firm EMA Partners International, the Indian newspaper The Economic Times reported in June that in India, only one in ten companies across all industries has a woman at the top.
The new ruling should have a positive effect on these numbers. The women definitely feel so.
Naina Lal Kidwai, Country Head, HSBC India, says, “This is a very significant step for women’s rights and growth within corporate India.”
Kidwai repeatedly ranks in the Fortune global list of Top Women in Business, as well as in The Wall Street Journal and Financial Times global listings of women to watch. “Even though we are far above global standards when it comes to the banking and IT sectors, we are lagging behind in many other areas. By making it mandatory, we are ensuring that the gap is somewhat bridged,” she says.
While women make up roughly 50 per cent of India’s population of 1.2 billion, in terms of female labour participation, it ranks a dismal 120th among the 131 nations surveyed by the International Labour Organisation last year.
Credit Suisse’s The Global Gender Gap Report 2013 ranked India at 101 out of 136 countries and found that only 9 per cent of the firms surveyed had women as part-owners.
The numbers are dismal, but for a nation not even seven decades old, India has come a long way. In the US, when Fortune brought out its first list of most powerful women in 1998, only two on that list headed Fortune 500 companies. By 2012 the number had grown to 20, but that’s still a paltry 4.8 per cent.
If the gripe is widespread gender discrimination, laws, policymakers and companies are attempting to turn the tables. Many companies have begun grooming female employees to take over key positions within the organisation. Giant multinationals such as Heinz, Colgate-Palmolive, Shell, Kellogg’s and Diageo are all led by women chief executives in India. Even the new government has surprised activists by appointing women in more than a quarter of the cabinet positions, a sharp increase on the last government.
Times are changing
Executive search firms have also decided to throw their weight behind the move to reduce the gender gap, insisting on including a certain percentage of women in their candidate shortlists and focusing on talent mapping to ensure female managers get a chance to occupy key posts.
At global executive search firm Egon Zehnder, 30 per cent of the candidates the firm presents in a search are women. It believes that with corporate India’s looming talent crunch, women represent a huge untapped talent resource. Mayank Chandra, Managing Partner, Antal International, a global recruitment firm that is conducting in-depth analysis to map women leaders, says the shift has already happened.
“In recent history, we have seen clients going to the extent of paying 2 per cent more than the agreed rates if we are able to source women candidates for them.”
Equal opportunity
Madhuri Sen, MD, Waggener Edstrom, who is not pro reservation of any sort including those based on gender, says, “I’d rather favour equal opportunity as any group allotted reservations can’t be considered equal until such time that they earn their way on their own merit.
“Ensuring that corporate policies do not discriminate should have been enough. Gender-based reservations would only breed more disrespect for women among their peers.”
When just ensuring that four seats in every public transport bus in Mumbai be reserved exclusively for women passengers nearly two decades ago caused a furore among male passengers, what could happen when there is position, power and prestige at stake? Will an enforced reservation backfire on the very cause it seeks to correct?
For Apurva Purohit, CEO, Radio City, reservations of any kind go against her nature. “In the long view, they encourage mediocrity, but there are certain moments in history where reservations for a limited period of time become essential to ensure that a minority group is allowed to flourish and grow,” she says.
Home before career
We are glad to celebrate every minuscule percentage increase that decreases the gender gap and applaud the new law — but the fundamental question remains, why are there so few women making it to the top? The reason women do not rise to the top in India isn’t very different to that in China, the US or anywhere else in the world.
While at the entry level the proportion of women in the workforce is as high as 30 per cent, it dramatically reduces to half at the middle level.
“This is primarily because the moment women get married, there are the pulls and pressures of dealing with both work and family, of getting torn by the guilt of leaving young children at home and of having limited support to help balance work and home. Equally, women in their own minds believe that they are operating in an either-or mode and as a result mentally find it easy to give up their careers,” says Purohit.
“With 15 per cent talent availability at the mid-level, no wonder very few women rise to the top.”
For all the B-school education, power suits and jet-setting lifestyle, “the woman is even more a homemaker today than ever before with no one else at home to share her responsibilities,” says Nina Elavia Jaipuria, Executive Vice-President, Viacom 18 Media, India, attributing this to the joint family going nuclear. >
Chandra says, “The social fabric encourages women to put home and family before profession. This is the major reason companies were apprehensive about giving women leadership positions earlier.”
If family is being seen as a deterrent to the heights of success women could have achieved, were they not to be traditionally tied down? And what of the same family when they are busy making it to the top?
“Unfortunately, in the race to have women equalised to reach the top of the corporate ladder, the question of how would the family — the basic unit of all social order — really cope with no one prioritising it has fallen on the wayside,” says Sen.
Freedom to choose
Turning the debate on its head, Sen points out that the battle isn’t so much about equality as it is about freedom. “Freedom to choose, I believe is the greatest freedom over any other. And at this time, social attitudes primarily limit that freedom. If that can change, legal and corporate policies would have to follow suit and that is a very very long way away from where we are today,” she says.
Roopa Kudva, Managing Director and CEO of rating agency Crisil, believes the intent of the law is commendable in that it seeks to correct a globally pervasive phenomenon of under-representation of women in corporate boards.
“Women in boards and other high positions act as role models for aspiring young women entering the workforce and that, I think, is a more positive outcome of this regulation,” says Kudva. “The real problem is not that there are few women at the top. That is just a symptom of the bigger problem that fewer women than men enter and stick around in the workforce long enough to reach these positions.”
Having said that, Kudva believes that it is important that decisions to appoint an independent director also take into account competency and experience as well as the candidate being the right fit for the job.
Hold that thought
But when India’s largest private sector company Reliance Industries fulfils the mandatory quota by opting for a female relative instead of appointing outside talent, the futility of the law is pronounced. In June, Nita Ambani become the first woman to be appointed on the board of Reliance Industries. Other companies hiring female relatives include textile majors Raymond Group and Century Textiles and Industries as well as the Modi Group that anchors a diversified portfolio including tea and beverages, consumer products, chemicals and more.
However, women, even from leading industrial families in the country, have had very little involvement in running their respective family businesses, points out Kidwai. “So I don’t see why it isn’t time they took their rightful place on the board. No business school can teach you what just sitting on the board of a company can. It’s the best learning ground,” she says.
If it was their rightful place, then why the long wait to claim ther rightful spot in the sun? If it takes a law to secure these capable women a position on the board of their own companies, then is that truly a victory for anyone?
If competency, experience and eligibility truly were the cornerstones for career advancement in this country, then the gender debate would be a moot point. The ground reality is that traditionally, women have had to work twice as hard to prove their capabilities.
“If appointing a female relative to the board is tokenism, then I’m okay with tokenism. What makes you think that every male director is a genius? They have learnt through osmosis over decades. It’s time we let the women do the same. To wait for the best female for the position and be okay with an average man — that to me is hypocrisy,” says leading corporate attorney Zia Mody, Senior Partner, AZB & Partners.
What can be done?
It is obvious the climb to the top cannot be a solo effort, acknowledges India Inc. Clearly, supportive policies that help women stay in the workforce during the crucial childbearing years, safety in the workplace, and an open culture that demonstrates that women too can succeed are three critical aspects that will help women shatter the glass ceiling, believes Purohit.
Reservation policies and mandates in corporate structures can only go so far as to shake organisations out of their jaded grooves. “But what India needs is a cultural shift in attitude,” says Jaipuria.
“Both men and women need to share household responsibilities equally, hence allowing the woman to nurture her career and reach the top. On the other hand, while it shouldn’t matter that an employee is a man or a woman, organisations must remember that women may need to take breaks in their careers, and this does not take away from their potential.”
With organisations such as HSBC, Oracle, IBM, American Express, Godrej and the Tata Group taking the lead with the diversity initiative by offering flexi-hours and back-to-work programmes for mothers who quit their jobs, it appears the road ahead for women in corporate India will be a lot smoother. n
