Golden Skirts and Lone Woman Directors: Unraveling the Pattern of Singular Female Representation on Indian Corporate Boards

The fact that about 60 percent of Nifty 500 companies have only one woman board member highlights a prevalent trend of minimal gender diversity in corporate leadership.

This statistic emphasizes the need for greater efforts to promote inclusivity and gender balance in the boardrooms of major Indian companies.

The EY report from October 2022 indicates a positive trend in women’s representation on Indian corporate boards.

According to the report, women’s presence has tripled, increasing from 6 percent in 2013 to 18 percent in 2022. This suggests a notable improvement in gender diversity within corporate leadership over the specified timeframe.

SUMMARY

1. The presence of lone woman directors on several boards is often attributed to companies adhering to the minimum legal requirements rather than proactively fostering gender diversity.
2. According to EY data, approximately 60 percent of Nifty 500 companies have only one woman board member. This statistic underscores a common trend of limited gender diversity within the boards of major Indian companies.
3. In India, despite the existence of “golden skirts,” the situation is not as extreme as in Norway, where women are reported to hold 25-35 directorships each.

In the nearly 10 years since the Securities and Exchange Board of India (Sebi) made it mandatory for listed companies to have at least one woman director, progress has been made.

An EY report from October 2022 indicates that women’s representation on Indian corporate boards has tripled from 6 percent in 2013 to 18 percent in 2022.

Despite this positive trend, a closer look suggests that the country is still some distance away from achieving substantial progress beyond mere compliance.

Several boards in India have only one woman director as companies often adhere to the minimum legal requirement. According to EY data, around 60 percent of Nifty 500 companies have just one woman board member, and less than 5 percent have women serving as chairpersons.

A mere nine out of the Nifty 500 companies achieve 50 percent women’s representation, highlighting the need for more significant strides towards gender diversity in corporate leadership.

Vinita Bali, former MD & CEO of Britannia Industries, shares her experience of initially being the lone woman independent director in boardrooms.

However, she notes that this situation has changed, attributing it to the boards she has been a part of in India, such as Titan, CRISIL, and Syngene. These companies, she says, prioritize diversity beyond gender.

In India, despite the presence of ‘golden skirts,’ a term referring to a small group of distinguished women holding multiple board positions, the situation is not as extreme as in Norway, where women may hold 25-35 directorships each.

The Companies Act, 2013, has contributed to regulating this scenario by imposing caps on the maximum number of directorships a person can hold—10 in listed companies and 20 across all companies.

However, there is still concentration in India, as indicated by the 2022 EY report, with 605 women holding 803 board positions in Nifty 500 firms. The Companies Act has also mandated certain firms to include at least one woman on their boards.

Pallavi Shroff, Managing Partner of legal firm Shardul Amarchand Mangaldas, acknowledges the situation and, with five directorships, is among women directors with the highest number of board representations in Nifty 500 companies.

Shroff emphasizes that companies should recognize the valuable contributions younger women can bring to boards. She also believes that senior women board members have a responsibility to encourage the appointment of newcomers.

Radhika Gupta, MD & CEO of Edelweiss Asset Management, suggests that it might be convenient to rely on a few familiar names, but there should be a concerted effort to broaden the pool of women in the workforce rather than just focusing on boards, considering that boards primarily serve an advisory and oversight role.