By Moksh Garg and professor Promila Agarwal
The onset of the 21st-century marked a growing emphasis on achieving gender equity in the organizational context. Implementing gender-affirmative policies and action plans (such as the appointment of at least one women director) has led to tangible improvements, increasing the number of women directors on corporate boards from 6% in 2014 to 17% in 2020 (IIAS, 2020). The increase in the number of women directors, albeit legally enforced, reflects changing gender dynamics at the board level. However, does this upward trend necessarily indicate corporate boards becoming gender-diverse in a true sense?
The current discourse on improving gender balance in Indian corporate boards is woven around the increased visibility of women, focusing primarily on numbers. While numbers are undoubtedly significant as a critical mass of women is required to effectuate substantive outcomes and elevate their status in a male-dominated setting but numbers alone do not accurately represent the whole reality. Therefore, we need to look beyond numbers to get closer to the phenomenon. To elaborate on our seemingly counterintuitive argument, we present the following pieces of evidence, namely – lack of an internal pipeline of women directors and gendered work allocation.
The lack of an internal pipeline of women directors implies that on a relative basis, more women directors occupy the position of an independent director on the board. A closer look at the distribution of the number of women directors would substantiate our claim. The total number of non-independent women directors to independent women directors is 2:3, whereas the ratio stands roughly balanced for men (i.e., 1:1). To make the matter worse, there are eight men executive directors for every woman executive director. In contrast, the ratio subsides to 5:1 in the case of independent directors, underscoring the fact that women are mostly appointed as an independent (or external) director. The reduced gender-disparity in the case of independent directors can also be explained by the SEBI’s amendment in the LODR Regulations (IIAS, 2020).
While independent directors play a critical role from a governance standpoint, they do not command commensurate power and influence to shape the managerial processes and outcomes. There have been multiple instances where the role played by independent directors has come under public scrutiny for not meeting the shareholders’ expectations. The lack of executive women directors partially stems from the lack of women senior executives. According to the study by professor Promila Agrawal, IIMA, the percentage of women in top management (5%) and senior management (7%) is significantly lower than the percentage of women on corporate boards (16%) for FY 2021. Therefore, organizations need to create strong women executive leadership such that their inclusion on corporate boards leads to substantial outcomes.
Next, we consider the case of gendered work allocation. The gender-based stereotypes originating from the collective sub-consciousness about gender role influence work allocation at the board level. The same study by professor Promila Agarwal argues that the participation of most women on corporate boards in India is restricted to committees with stereotypical gendered job roles such as HR, grievance management, and CSR. They remain far from being appointed to more powerful board committees, traditionally assigned to the male sex, such as the nomination and remuneration committee. In such a scenario, the inclusion of a greater number of women fails to dislodge the deeply entrenched power dynamics and elevate their status within the board.
Therefore, an increase in the number of women directors reflects half reality. As Verna Myers said, “Diversity is being invited to the party; inclusion is being asked to dance”. Quite similarly, it is imperative not only to have more women on boards but also to have women in managerial critical roles on boards.
The authors are research associate and professor at IIM Ahmedabad