Women's representation on top 100 company boards shows significant progress: Survey

New Delhi: The representation of women on the boards of India's top 100 companies has significantly improved over the past four years, with only five firms lacking a woman independent director as of March 2024, according to a survey released on Monday. The 5th Annual Corporate Governance Survey by Excellence Enablers are based on the annual reports and website disclosures of Nifty 100 companies. As of March 31, 2024, five companies, including four public sector undertakings (PSUs) and one public sector bank (PSB), did not have a woman independent director on their boards. While this is an improvement compared to 21 such companies in FY 2021, the persistent lapses highlight the need for stricter enforcement, the survey revealed.

While having at least one woman independent director (ID) on boards has been mandated under Section 149 of the Companies Act, 2013, and Sebi's LODR regulations, there is no similar provision to ensure that women executives are nurtured to graduate to board positions, according to the survey. "This can happen only if a sufficient number of competent women are identified and are provided appropriate career progression in the organisation," it added. The survey highlighted the progress and persisting challenges in achieving gender diversity in leadership roles, representation on boards, and compliance with governance norms. The representation of women in top leadership roles remains low but shows signs of improvement.

The number of companies with women Managing Directors (MDs) increased from two in FY2021 and FY2022 to five in FY2023 and FY 2024. However, only three companies consistently had women MDs across these two years. Also, the representation of women as chairpersons has similarly grown, with five companies reporting women Chairs in FY 2024, compared to two in FY 2021. However, only two companies have had women chairs consistently across the four years. The survey highlighted a steady increase in women's participation and leadership roles in board committees over the past three financial years. Several committees consistently had women as Chairs, including Audit Committees (4 companies), Nomination and Remuneration Committees (13 companies), Stakeholders Relationship Committees (15 companies), Risk Management Committees (10 companies), and Corporate Social Responsibility Committees (15 companies).

This progress indicated that women are increasingly contributing to critical governance and oversight roles, even if a broader gender balance remains elusive. In each of the last four financial years, 15 companies consistently had one or more women in Key Managerial Positions (KMPs). This steady representation at senior management levels is vital for building a pipeline of women leaders for future board and executive roles.

Also, the survey noted that a crucial aspect of corporate governance is the separation of roles between the Chairperson and MD to ensure accountability and transparency. The Chairperson leads the board, while the MD oversees management operations. Combining these roles concentrates power, undermining the principle that management should be answerable to the board. Despite its importance, this separation is not mandatory. The survey found that in FY 2024, nine non-PSU companies did not separate the roles of Chairperson and MD, down from 10 in FY2021 and FY2023.