| Getting ready for the boardroom |
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With the new Companies Act and the Securities and Exchange Board of India (Sebi)' s corporate governance code mandating greater participation of women in company boardrooms, senior women professionals as well as young women from business families have started readying themselves. Recently, a group of 35odd women, including chief financial officers, chartered accountants, human resource heads, social sector executives, educationists, lawyers and members of business families, went through a day- long board- readiness workshop, organised by accounting and consulting firm EY. As the motley group was being briefed about the responsibilities, liabilities and risks attached with directorship positions, one of the participants, asenior human resources executive, sought to know whether similar workshops were held for men. " If not, why do women need to prove their preparedness for boards?" she asked, drawing applause from the entire group. At the gathering, a suggestion endorsed by many was such workshops should be open to both men and women. The moot question, a participant said, was, " Are men ready to have women on boards?" Senior marketing professional Sangeeta Talwar, who has 30 years of experience in several multinational and Indian companies and is an independent director in the boards of four firms, recalls being the only woman in the room at many board meetings. "Whether boards are ready for women or not is their problem, not mine," she says, nonchalantly. Her mantra for women aspiring for board positions: " Have confidence in your potential and stand up for your values." Arun Duggal, chairman of Shriram Capital, head of the Federation of Indian Chambers of Commerce and Industry's centre for corporate governance and a member on the boards of several companies, has a more empathic view of the churn in boardrooms. "There is a social change taking place in boardrooms," he says. Duggal, who has mentored 40 women for board positions in the past year, adds currently, the representation of women on the boards of India companies is dismal, barely six per cent, and this is almost equally divided between members of promoter families and independent professionals. Perhaps, in two- three years, once the value of gender diversity in boardrooms is established, such workshops will become redundant, he says. According to a Sebi mandate, all listed companies have to have at least one woman director on their boards by October 1. According to estimates by indianboards. com, 830 woman directorship positions in NSE- listed companies have to be filled through the next four weeks. The Companies Act, 2013, stipulates at least one woman director for companies with revenue of ₹ 300 crore and/ or paid- up share capital of ₹ 100 crore. The deadline to comply with this is April 1, 2015. Even as corporate India gets used to gender diversity in boardrooms, it makes a lot of business sense for companies to encourage high- potential senior executives to join the boards of other firms. " It helps these executives broaden their perspectives and enhance their networks," says Geeta Mathur, chief financial officer at Helpage India, a non- profit organisation. Having come through a mentorship programme herself, Mathur has taken up board positions in three companies since January this year. As global chief financial officer of NIIT Tech, Pratibha K Advani has, through the years, worked closely with board members. " For having a woman on the board, the criterion has to be nothing other than competence. Actually, I am against quota or reservations," she says. Mentors say before accepting any board position, it is important to carry out due diligence of the company and know the promoters and senior management to establish acomfortable working relationship. It helps to talk to bankers, auditors and suppliers associated with the company to get a sense of its corporate governance track record. " Just don't join a board in a hurry," says Mathur. Many young women from business families are also taking the opportunity to join boards seriously. Meenakshi Chaudhary from Kolkatabased Vikram Solar, a photo voltaic panel manufacturer, is keen to join her husband on the board. " Though the position comes to me as wife of the managing director, I want to train myself for the role. As a woman, I am very conscious of the risks and liabilities that come with the role," says Chaudhary, who has been involved in streamlining the operations and processes in the group. For sisters Paridhi Minda and Palak Minda of auto components maker Minda Industries, attending a workshop for women directors is a step towards preparing themselves for the board. " We aspire for a board position, but don't want to join the board just on the basis of our surname," says Paridhi. Through the past fiveseven years, the sisters have been working at the company in various capacities and across departments and this, Paridhi says, will bring about a broader perspective to the board. "It will be difficult for any professional to match that," she adds. As deadlines to meet the Companies Act and Sebi norms on board composition near, women aspirants prepare to play greater roles Women on board - long road ahead INDIA Number of listed companies surveyed: 1,470 Total number of independent directors on board: 8,990 Number of women independent directors on board: 350 %of women on board: 4% Vacancies to be filled: 966 Deadline: October 1, 2014 WORLD Nearly one- fifth of the world's 200 largest companies have no women directors Women in corporate boards (%) Norway 41 Sweden 27 France 27 Denmark 20 Germany 19 Source: Company website, McKinsey analysis. ( All data for 2013, while Denmark reflects the situation in 2011) Three largesteconomies — US, China and Japan — have no quotas for women in the boardroom |
| 'The goal is to make women directors effective' | |||||||||||
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Yes! This is a social change and will take time. We have to move in that direction and, in time, people will be convinced they need to have gender diversity at the board level, not only to meet regulations but to do what is good for the company. To have different points of view and perspectives leads to better decision- making. Once they are convinced, the issue of having more women on boards will be addressed in five to 10 years. This will become an automatic process. You recently managed a mentorship programme to help 40 women directorship aspirants. What are your key takeaways? Ifound women serious and focused in learning about corporate governance. But I also find them a little hesitant, not as aggressive as they should be. It is still very early. Mere placement of women on boards isn't enough; it is important to make them effective on boards and see to it that they distinguish themselves. That is the goal of the mentorship programme. Board placement is a complex process. Promoters and board chairmen need to develop a lot of comfort and trust about the candidate before having her ( or him) on the board. Ihope once women join boards, they distinguish themselves. Then, we can shut the mentorship programme. The sooner we reach that point, the happier I will be. You don't have a mentorship programme for men. So why should we have one for women? This is an interim step. What are the key concerns firsttime women directors have on stepping into boards? Ithink their concerns start with: " Do they really want me? Or is it just because they have to check the box?" The second is: " Will I be put on a pedestal? Will I be judged in a harsher way than a male colleague? Do I have to work extraordinarily well to be considered OK?" One of the things I tell them is once you join a board, persuade the management to have not one, but at least two women directors. How should aspiring women directors deal with concerns about whether they are fit for the job? Those aspiring for directorship positions should be distinctive in their fields. They should have a record of superior accomplishments. Also, there are judgemental factors such as maturity, leadership qualities, the ability to be part of a team, but have individual strengths and gravitas to make a positive change. In corporate India, many boardrooms are seen as ' old boys clubs'. Do boards need to re- orient themselves to welcome women? Iwould say it is a mixed picture. But on an average, boards are not that well prepared. They will have to be pushed a little bit, as the regulations are doing. In time, opinions will change, as more women step into boards and begin to contribute. They will see the merit of this initiative. When will this change come about? Globally, this is a gradual process. In India, it will take five to 10 years. When the issue is addressed, whoever is capable — man or woman — will come on the board. Are companies open to senior management executives taking up board positions in other organisations? More and more progressive companies are allowing this. First, this is in the interest of companies, as it allows senior executives to develop their governance capabilities and for personal growth. As senior executives move in other circles as board members, their contacts and learnings are beneficial to the company. It benefits both companies and senior executives. There is a concern many board positions will be taken by women from promoter families. It is a fact of life. In family businesses, too, the sons and nephews often join boards. Now, the daughters and nieces, who are equally capable, will step in. I hope they will compete with their brothers and cousins and demonstrate think there is a struggle ahead for women on boards, irrespective of whether they are from promoter families or not. What are your plans for Ficci's centre for corporate governance? Soon, we will start the second batch under Anjali Bansal's leadership of the mentorship programme for women on corporate boards to improve boards' effectiveness. By the year- end, we ARUN DUGGAL, chairman of Shriram Capital, who heads the Federation of Indian Chambers of Commerce and Industry ( Ficci)' s centre for corporate governance, has been closely involved with a mentoring initiative to get more women on corporate boards. Duggal, an ex- banker, tells Sudipto Dey it will take five to 10 years for India Inc to see value from gender diversity in its boards and business. Edited excerpts: ARUN DUGGAL Chairman, Shriram Capital
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