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25 May 2020, Mumbai: Institutional Investor Advisory Services (IiAS) published its study on “Corporate India: Women on boards.” SBI Mutual Fund has partnered  this study.

SBI Funds Management is India’s largest asset manager.  It is a signatory of UNPRI - the United Nations-supported Principles for Responsible Investment. 

This study is as a part of the mutual funds ongoing commitment to ESG (Environmental, Social and Governance) and responsible investing.

Why is this headcount of women directors relevant?

Many argue that there is gender equality in hiring at entry level today, where roughly equal number of men and women are hired, which was not what was witnessed three decades ago – from where today’s leaders are being drawn. And that we are probably looking at the wrong data.

It is difficult to imagine a very different outcome in future, unless there is a conscious effort to bring about change by having more women continue to work (and not drop out) till they reach the ‘threshold of organizational leadership. And as more women reach this stage, more will find themselves walking into the corner office. And women in the corner office and on boards, serve as a role-models to the many who are entering the work-force today.

India and the world

European countries with women representations on boards being between 30-40% continue to lead the way. In USA, women hold 20.4% of the board seats of R3000 companies, in 2020. In the UK, the 30% Club achieved their stated target of a minimum of 30% women on the FTSE-350 boards by 2020. Initially investors and more recently investment bankers are driving board diversity.


India needs catching up: NIFTY 500 companies have 17% women representation on boards as on 30 March 2020. In India it is regulatory changes that continue to drive the dialogue on gender diversity. Recent regulatory change makes it mandatory to have atleast one independent director on board since 1 April 2019.


Corporate India is absorbing the benefits of gender diversity. More companies now have one woman on their boards, and several boards have more than one.  Regulations, it appears, have rejuvenated the focus on gender diversity in boardrooms. Although there has been a lot of progress, India continues to trail behind global standards on including women in boardrooms.

While at the board level, gender diversity is improving, one of the challenges that India, and several other markets face, is gender diversity at the leadership and middle management levels. This is a critical fix that corporate India needs to address: it is only then that gender diversity at the board level will become a natural outcome, rather than a focused fix.

Data from IiAS' Study

The effects of the regulatory push are clearly visible:

  • NIFTY 500 companies had 17% women directors (777) of the total directors (4,657) on 30 March 2020.

    • While MNCs have a higher female representation at 19%, PSUs trail behind with 11% female representation.

    • Of the 777 directorships held by women on board, 71% are independent directors (548)

  • Majority of the women being appointed in leadership roles have professional experience and expertise.

  • 43% of the boards had two or more women directors (as on 30 March 2020, up from 21% from three years earlier).

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

    • 4% of the boards are chaired by women.

    • As on 30 March 2020, Nomination and Remuneration Committees had the highest proportion of women at 18% (up from 13% on 31 March 2017).

    • Other Committee memberships include: 16% CSR (16% on 31 March 2017), 16% Audit (12%) and 14% Stakeholder Engagement Committee (10%).

  • The healthcare sector has the maximum percentage of women directors at 21%. Energy with 11% has the lowest.

  • The average tenure of women on the board is 4.8 years. For men it is 8.7 years.

This report 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.

You can read the full report by clicking this link.

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