Institutional Investor Advisory Services (IiAS) has published the third edition of its study on “Corporate India: Women on boards.” APG has partnered IiAS in this study.

Gender equality is one of the seventeen sustainable development goals (SDGs) set by United Nations. Securities and Exchange Board of India (SEBI) has also mandated gender diversity disclosures under its Business Responsibility Reporting requirements. Appointment of at least one independent woman director is mandatory for India’s top 1000-listed companies by market capitalisation. Research studies often link higher diversity on boards with improved financial reporting. Women representation brings in a different perspective, intuitiveness, and a more collaborative style of leadership into corporate boardrooms. These factors, combined make gender diversity an important benchmark for IiAS while assessing India Inc for overall corporate governance.

At a global level, boardroom diversity continues to improve with an average of almost 24% female representation in corporate boardrooms. Europe and North America sit above the global average, with women making up 34.4% and 28.6% of company boards, respectively. Country-wise France leads the pack at 44.5% women representation on boards in 2021.

India also has progressed on appointing women on company boards; from 6% in 2014 to 14% five years ago. Women now account for 17.6% of directorships of the NIFTY-500 companies. Although the number of women directorships is increasing, the pace of new appointments has faltered with just an aggregate 1% increase over the last three years. Based on these current rates, India will take till 2058 to achieve 30% gender diversity on boards.

"The approaching 2024 board refresh marking the end of the grandfathering of Independent Directors’ previous tenure, provides a unique opportunity to reset the pace of change, by appointing 30% women on boards. Corporate India must take the opportunity to refresh the board and build in stronger gender diversity. For this, boards need to change their lens away from mere regulatory compliance, to think about women as a share of aggregate board size. The target must be, at the very least, 30%" said Amit Tandon. managing director, IiAS

“APG has always believed that a balanced and diverse board contributes to effective decision-making, which ultimately leads to business resilience and value creation over the long term. Diversity, as a theme, has several attributes including gender, social and ethnic background, education, nationality, work experience and age. The board should ideally take all these factors into account to achieve an optimal board composition. But among these, gender diversity is often a good place to start because it is tangible, easily measured, and straightforward in terms of disclosure and compliance,” said Aaten Thijs, CEO, APG Asset Management Asia.

“Women representation brings in a different perspective, intuitiveness, and a more collaborative style of leadership into corporate boardrooms underscoring the need for companies to move beyond the regulatory dialogue on gender” said Hetal Dalal, President and COO, IiAS.

Data from IiAS Study

• On 31 March 2022, the NIFTY-500 companies had 4,694 directorships, of which 827 (17.6%) were held by women.

• On 31 March 2022, 48.6% of the NIFTY-500 companies had two or more women directors on their boards. This is a rise from 45% on 31 March 2021, and 44% on 31 March 2020.

• On 31 March 2022, 159 of the NIFTY 500 companies had women representation in excess of 20% of board composition; this is a steady rise from and 146 companies on 31 March 2021and 139 companies on 31 March 2020.

• PSUs continue to fare poorly on gender diversity, given that several of them do not comply with board composition norms prescribed by regulations.

• A closer look at the board composition of the NIFTY-500 index suggests several companies voluntarily aim to build a diverse board, beyond the regulatory requirements

• Women are now getting a say on board composition and executive remuneration.

• Women chair the board of 22 of the NIFTY 500 companies

• 25 women are CEOs and another 62-hold executive directorships

• Women now chair one in five NRCs and CSR Committees, and one in ten audit committees.

• In aggregate, the NIFTY-500 companies have 2960 committees, for an average of 5.9 committee for each entity. 442 (14.9%) of these are chaired by women and the remainder 2518 by men.

• The average age for women is 58.7 years (56.0 years in 2020) and that of their male colleagues is 62.3 years (61.0) showing that this age gap is slowly narrowing.

This study will help companies move beyond the regulatory dialogue on gender, to boardrooms and a wider audience. After all, there is enough research that suggests that diversity and inclusion factors correlate with better financial performance of companies. And while correlations are not necessarily causation, the correlation does indicate that quality of earnings and performance improves when leadership commits itself to diversity.

To download the report click here