Gender Equity in the Boardroom

The Case of India

Payal Kumar, Ganesh Singh

• Publisher: Emerald Publishing Limited
• Year: 2020
• Print ISBN: 9781839827679
• eBook ISBN: 9781839827662
• Topic: Business
• Subtopic: Business General
• Index: Business

Since 2013, company boards in India have been legally required to have at least one female director. However, gender diversity in boardrooms across India remains below the global average, and a number of the women who do serve on boards were appointed largely because they are related to a founder or owner of a company. Since India is recognised as one of the world's fastest growing emerging economies, it is important to study in detail why gender diversity at board level remains so low. Is this a result of workplace bias, a pipeline issue, or due to other reasons?

Gender Equity in the Boardroom: The Case of India offers just this sorely needed study. Drawing upon interviews with board members and executives of both public and private companies, as well as with aspiring female leaders who are currently at mid-management level, and supplementing this with the authors' own survey of the make-up of 305 Fortune India 500 companies, this book offers incisive insights into questions about board-level gender representation across industries.

Offering both rigorous research and analysis as well as suggestions for practical policy changes, this book is essential reading for HRM and leadership scholars, and is also of keen interest to policymakers throughout the world.

1

LITERATURE REVIEW AND STUDY METHOD

1. INTRODUCTION: GENDER EQUITY IN THE BOARDROOM

The importance of diversity in upper echelons has been a topic of scholarly attention since Hambrick and Mason’s seminal work (1984), in which the strategic choices of a firm are said to be partially dependent on the leaders’ backgrounds. Since then many reasons have been cited for the need for greater gender diversity at the upper echelons of power – apart from the social equity stance, there are also arguments for the business case, with studies suggesting that companies with more women on its boards produce better financial results (Deloitte Global Center for Corporate Governance, 2017).

According to an analysis of around 7,000 companies in 60 countries carried out by the Deloitte Global Centre for Corporate Governance in 2017, women held only 15% of all board seats in 2017 – up from 12% in 2016. There are several observed reasons for this low representation, including incongruity between the leadership and traditional gender roles, stereotyping, organisational barriers, power dynamics, and unconscious bias of those in power. Commenting on this 3% improvement, Dan Konigsburg, Senior Managing Director, Deloitte Global Centre for Corporate Governance, Deloitte Global said,

For many who are advocating faster change in the composition of our boardrooms, including regulators, governments, investors and others – including Deloitte – they will no doubt find this to be unacceptably slow improvement. (Deloitte Global Center for Corporate Governance, 2017, p. 3)

Several countries have now introduced quotas to improve women’s representation in boardrooms (i.e., Norway enacted a law as early as 2003), including India, through the Companies Act, 2013. As per this Act, one or more women need to be appointed to the boards of listed companies and other large public limited companies. Furthermore, any vacant board seat previously held by a female director needs to be filled by another woman. As per the Securities and Exchange Board of India, boards of the largest 500 listed companies had to appoint at least one female independent director by April 2019, while other companies had to appoint one female independent director by April 2020.

While there has been an improvement in the number of women on boards from 7.7% in 2015 to 12.4%, India still lags behind the global average of 15% as per the 2017 Deloitte report. As per the 2019 Deloitte report (6th edition), India seems to be catching up, with women serving on National Stock Exchange (NSE)-listed company boards at 16.7%, compared to a 16.9% global average. But this is still not enough to be jubilant about. After all, a sizeable number of those taken on as board members are often a family member rather than independent director candidates, selected by a founding or controlling owner, more as a token selection.

Putting the painfully slow, incremental growth into perspective, Deloitte Global Board Chair Sharon Thorne says,

If the global trend continues at its current rate of an approximately 1 percent increase of women on boards per year, we will be waiting more than 30 years to achieve global gender parity at the board level. (Deloitte Global Center for Corporate Governance, 2019, p. 7)

Apart from the Deloitte reports, it is alarming to see that India – one of the fastest growing emerging economies – has fallen 21 places in its overall Global Gender Gap Index ranking of 2017 to 108, much behind neighbouring countries like Bangladesh (ranked at 47). India has slipped further to 112 in the World Economic Forum’s Global Gender Gap Index 2020. An International Labour Organization (ILO) report suggests that India can add $1 trillion to its economy by 2025 if it closes the gender gap at the workplace with greater female workforce participation.

While India has added agender diversity dimension to corporate governance to realign with global best practices through the Companies Act, 2013, we ask, in spite of legislation, why is the boardroom representation of women still so low? The last major study to understand this phenomenon was undertaken in 2010 by Standard Chartered Bank, which looked at the representation of women on the boards of India’s leading companies on the Bombay Stock Exchange (Banerji, Mahtani, Sealy, & Vinnicombe, 2010). This study concluded that out of a total of 1,112 directorships on the BSE-100, 59 directorships were held by women, representing just 5.3% of all directorships.

Following on from this study, it would be interesting to see why, since then, the situation has not improved much compared to the global representation of women on boards. In other words, what are the antecedents for so few women on boards in India? Is it due to the workplace bias as a structural impediment, or a pipeline issue, or are there other compelling reasons? While women in a few sectors such as banking, and also aviation, have cracked the glass ceiling, why has this not been replicated in the other industries?

2. METAPHORS GALORE

The corporate boardroom has been a male preserve for a considerable time now. Women still have to face challenges in taking on critical management roles. While globally women occupy 34% of management roles (World Economic Forum, 2018) in the boardroom, their representation is much less, out of which women make up just 5.6% of the leadership positions (Zehnder, 2018).

Several metaphors have become part of the lexicon used to describe the phenomenon of under-representation of women in board and leadership positions. The most enduring one seems to be that of the ‘glass ceiling’. One of the first references to this was in an article published in The Wall Street Journal in 1986, which mentions that even those few women who rose steadily through the ranks eventually crashed into an invisible barrier. Even though the executive suite seemed within their grasp, they could not break through the glass ceiling (Hymowitz & Schellhardt, 1986).

Then there is the ‘glass escalator’ at work in what are considered to be ‘female-dominated’ professions like nursing, teaching in primary school, librarianship, and social work, where ‘subtle mechanisms seem to enhance men’s position in these professions’ (Williams, 1992, p. 263). More re...

Table of contents

• Cover
• Title
• 1. Literature Review and Study Method
• 2. Thematic Analysis: Interviews of Board Members and Senior Executives
• 3. Thematic Analysis: Aspiring Woman Leaders
• 4. Analysis of Female Representation on the Boards of Fortune India 500 Companies
• 5. Conclusion and Policy Recommendations
• Appendix: Gender Equality in India and South Asia Region
• Index