Indian businesses slow in getting women on board

It is said one woman is a token, two is a presence and three is a voice. But women may take many years to have their voices heard on Indian companies? boards, as gender diversity is yet to catch up with Indian businesses.

There are merely 5.3% women directors in the top 100 companies listed on the Bombay Stock Exchange. This is the lowest among their peers, the highest being in Canada at 15%, data from a joint research study between Britian?s Cranfield University School of Management and Standard Chartered bank released in September shows.

India?s family-run companies are stingy in offering board seats to women. Tata Sons, the holding company of India?s largest diversified conglomerate by revenue, and Reliance Industries, owned by India?s richest businessman, Mukesh Ambani, have no women on their boards. Aditya Birla Group, that has interest from mobile telephony to aluminum, has one representative in Idea Cellular, owner-chairman Kumarmangalam Birla?s mother Rajashree Birla.

Only two in the 100 top companies on BSE have a woman non-executive chairperson ? Savitri Jindal on JSW Steel, India?s third-largest steelmaker, and Jindal Steel and Power. India?s 56 companies in top 100 on BSE do not have any female representatives on their boards.

Reasons for such low female numbers are many. One, it relates to looking after family, second, juggling careers and families with many falling off the corporate ladder at mid-level and third, limited talent pool in a young economy like India which had social barriers in the early years of independence.

?Women have many more challenges when they juggle between a career and family,? says Arvind Agrawal, human resources department director at tyre-to-carbon black maker RPG Group. ?Companies need to display that understanding and implement flexible policies.? His group is yet to have a woman board member on any of its companies.

But, unlike manufacturing, woman power is catching up in financial services. Companies in the financial sector perform best in terms of gender diversity ? nine of the 11 banks listed on the BSE-100 have a woman on their boards and two of these banks have women chief executives.

Consultants say lack of women leaders are due to the lag effect of previous three decades where women stayed away from high-profile jobs. ?You are measured at the end of your career for a chief executive or a board member,? says Rahul Bhasin, managing director, Barings Private Equity Fund, which manages more than $1 billion. ?Many fall midway in their careers for family.?

But many countries, including India, are changing their policies to accommodate more women to promote gender diversity. Companies are walking the extra mile to find the right female candidates by paying more to head hunters. ?Companies are willing to pay 3% more fees as an incentive to find female talent,? says K Sudarshan, managing partner, EMA Partners, a head hunter. ?This is to have plurality in work force.?

The corporate affairs ministry has made it mandatory to have five or more independent directors, while listed companies should have one woman independent director as per the law. Now, 48 different women hold directorship in 59 companies among a total of 1,012 directors in 100 companies.

Some countries have gone a step further. In Norway, since January 2008, every organisation quoted on the Oslo stock exchange must have at least 40% of each gender on its board. The Spanish government has asked listed companies to ensure 40% women board members by 2014, while in France the deadline is 2015. In 2009, the United States Securities and Exchange Commission?s new code requires disclosure of how the board nomination committee considers diversity in selecting candidates for board positions.

Global women chief executives say there is greater demand for women in a globalised world. ?With the wave of globalisation tackling unanticipated competition and understanding now, different cultures and business climates have become imperative even in most mundane of business,? Liselott Kilaas, deputy chairman on the board of Telenor ASA, wrote in a foreword comment on a report ?Women in the Board Room, A Global Perspective?, released by consulting and audit firm Deloitte in November.

?In several aspects, the old economy ?universe? has exploded in size and complexity, severely stretching the skills, experience and insights of the board.?

?The world is taking notice of the potential and power of women?as consumers, as leaders and as a growing majority of the talent pool,? says Alicia Yi, managing director, strategic client services of Korn Ferry International Asia Pacific.

?There has been an increasing demand for female board candidates across the globe as companies start to recognise that successful boards should reflect the markets they serve and that homogenous leadership teams can be less equipped to do business in an increasing complex business environment,? she adds.