Women Directors in Indian companies: Role & Importance

The Companies Act, 2013 has laid great emphasis on the inclusion and role of women directors in Indian companies and has introduced Section 149(1), the provisions of which deal with women directors. Research has shown that women on company boards ...

By: Admin | Update: 2016-03-07 10:49:48

Women Directors in Indian companies: Role & Importance

The Companies Act, 2013 has laid great emphasis on the inclusion and role of women directors in Indian companies and has introduced Section 149(1), the provisions of which deal with women directors. Research has shown that women on company boards not only successfully increase production and sales but enhance the company’s corporate image as well by attracting more positive media attention. This ensures greater returns on equity by 4.4% on an average every year. In contrast, those companies with men only on their boards record ROE rises by a paltry1.8% in a particular fiscal. Chanda Kochhar, heading ICICI bank as also Kiran Mazumdar Shaw, owner and director of Biocon Limited have consistently shown great performances over the last few years and this has definitely made a positive difference to their company’s ROE.

By making the inclusion of women directors on the boards of those companies that compulsorily need to have women, the government too, has shown its preference for gender diversity. It has been established that any government’s failure to take note of gender diversity could lead to some very serious economic debacles in future. Change is accelerated only through dynamism which is so often seen in educated and progressive women nowadays. The Companies Act, 2013 has set no limits to the number of women who can be on a company’s board and this expectedly will improve corporate transparency. There is a concerted effort from many leading companies like Mahindra and Mahindra Ltd and the Essar Group to induct women from academic & research institutions, government agencies, audit and legal firms and non-profit organizations. It is imperative that every listed company must have at least one lady on its board, according to SEBI guidelines.

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