Promoters put female kin on board to meet Sebi deadline
31 March 2015
In response to a Sebi directive that listed companies must have at least one woman on their board, many companies have 'complied' by putting relatives of the promoters on the board to meet the 31 March deadline, a study has found.
In February 2014, the market regulator Securities & Exchange Board of India issued a directive asking companies listed on stock exchanges to have at least one woman on the board of directors by October 2014, a deadline that was later extended to the end of this financial year.
A report compiled by research firm Prime Database shows that over 50 per cent of the companies which have complied with the directive have got promoters' relatives on board, complying with the rule technically if not in spirit.
"Several companies have appointed women who are related to the promoter group - wives, sisters and daughters. So we feel that the objective of diversity shall not be met in such scenarios," Pranav Haldea, managing director of Prime Database, said.
The market regulator has warned of action against companies failing to comply with the directive. With the deadline expiring today, nearly 300 companies are scrambling to appoint a woman director on their boards.
"There are still a number of companies that haven't found competent women to be on their board of directors. Such an attitude must be condemned, and I hope CII (the Confederation of Indian Industry) takes this up, explains why this is happening and looks at what message we are giving to the outside world," Sebi chairman U K Sinha said at a conference in Delhi addressing the industry body's members.
According to a 2014 report by Catalyst, a global NGO that works to expand opportunities for women, the share of board seats held by women in India is only 9.5 per cent. Another report by Accounting Firm Grant Thornton lists India in the bottom three countries when it comes to senior management roles held by women.