One in five directors should be a woman, says new Companies Bill
It will now be little easier for ladies to climb up the corporate ladder as the ministry of corporate affairs has decided to include a new provision in the proposed Companies Bill, which would make it mandatory for companies with five or more independent directors to have at least one woman director on board.
The ministry says it's a move to break the glass ceiling in corporate India. It quoted a survey which finds that more than 70 per cent of boards in India do not have female directors.
The idea is to increase the number of Swati Piramals and Chanda Kochars – who are often the only female presence in all-male boardrooms of the companies they run.
But some of these iconic women CEOs say merit is more important than quotas. According to Dr. Swati A Piramal, director at Nicholas Piramal India. “My take is that it should be on merit. There shouldn’t be a law saying some kind of quota system because women directors need to know about corporate governance. I think there shouldn’t be a law it should be more of guidance or incentive.”
Sulajja Firodia Motwani, Jt. MD of Kinetic Engg believes that companies around the world do look at corporate governance as a serious issue and it is becoming more and more important She said there are women who would come forward on merit rather than a rule.
There may be other practical hurdles like there are about 5000 listed companies. Let us assume 80 per cent have five or more Directors. So, 4000 women directors are required. Even if the same women are taken on by multiple boards, the same Companies Bill says that one Director cannot be part of more than 10 companies. This means at the minimum, 500 to a 1000 qualified women.
Read more at: https://profit.ndtv.com/news/show/one-in-five-directors-should-be-a-woman-says-new-companies-bill-144036?pfrom=home-Business&c
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