Women On Board

The quota mandated by the Companies Act 2013 has increased representation of women across the industry, but does it indicate any real change?

‘‘The measure of any society is how it treats its women,” Michelle Obama famously said while campaigning for Hillary Clinton in 2016. May be that’s the reason why gender equality is prevalent most in developed economies while crime against women is maximum in conflict economies. Case in point: Afghanistan – where the progress made by women and girls in the past 20 years is clearly in jeopardy.

Businesses, too, mirror societies. Just as a nation’s success depends on the state of women in that country, a company’s true success depends on how inclusive it is. Research shows that firms with more women in senior positions are more profitable, more socially responsible, and rank higher on providing better customer experiences — among several other benefits. While the Women in Business 2021 report by global accounting firm Grant Thornton states that 47% of mid-market businesses in India have women chief executives compared with 26% globally, it doesn’t really indicate a real mindset change. India made the right move by mandating under the Companies Act 2013, appointment of at least one woman director as a board member for publicly listed and few other types of companies. The move led to more women representation across boards of Indian companies. In fact, a study by the Harvard Business Review has shown that 303 firms or roughly 61% of the top NIFTY 500 companies did not have a single woman member on their board in 2013. By 2017, things had changed with 82.8% of previous non-compliant firms appointing at least one woman on their board; 13.6% of these firms had appointed two or more women to their boards. Further, an Institutional Investor Advisory Services India (IIAS) study found that the number of women directorships as a percentage of total directorships have been on the rise. By the end of December 2020, 475 of the Nifty 500 companies had at least one woman director on their board.

While the Act has increased women participation on boards, many feel that reservations may lead to reverse discrimination and put working women at a further disadvantage. Women leaders often debate that they should be hired because of their ability and not because of any mandate.  

Kirti Patil, Head of Information Technology at Kotak Life Insurance, believes that while the quota approach is necessary to represent women in management or board positions across the corporate sphere in India, the association between gender, diversity and good governance is “more complex”.  “The issue that one needs to understand is how the integration happens into the forms of governance. For example, you know that just being a member of the board is not enough. We need to see if these members are also given additional responsibilities, such as being part of some board committees,” she says.

Other apprehensions about quotas also remain. “Quota systems may further promote inequality with women feeling of not having fully owned the place,” Patil warns. “They may initially empower women to take decisions but we have to be careful not to drift into tokenism.”

Agrees Anisha Singh, founder of SheCapital, an early stage fund that invests in high-growth women-led businesses. “Quotas are a touchy topic. People are either completely for them or they are dead against,” she says. But can quotas drive change? To that, she says that change needs to trickle down from the top. “Studies show that when women are on boards, they not only balance out things that increase the evaluation, but also recruit and hire more women.”

Yet, some are more optimistic about moving beyond the legally mandated quotas. Typically, multinational companies have done better in this regard. One such example is SAP Labs India, which recently appointed Sindhu Gangadharan as its first woman managing director. Gangadharan, who joined SAP way back in 1999, believes women representation has made a lot of progress since then.

“I see the positive impact that a diverse organisation brings to the bottomline and so the message of strong diversity is understood. I think it’s very clear now across industries and not just tech companies.”

SAP has been an early leader in that. Back in 2011, SAP’s board made a public commitment to raise the number of female leaders from a little over 18% to 25%. “We achieved that goal in 2017.  The board then continued its pledge to increase women in leadership by 1% every year, with goals reaching 30% of women in leadership roles in 2022,” explains Gangadharan.

But investments in gender diversity are still more visual than actual, points out Singh. “It’s a stone and is definitely going to cause ripples and that’s always good, right?” asks Singh. Patil, a bit more optimistic added that to be successful, management of corporates will have to look at broadening the scope of quotas, starting with recruitment. “Employers will have to ask: can we have a quota for every position that I am recruiting for? Can I at least have equal representation in the candidates that I am meeting while recruiting?”

Going Beyond Numbers

Adding women to boards makes perfect sense and benefits both female executives and the companies they work for. A research by the University of Virginia which examined over 12,000 companies across 45 countries, states that including women on boards promotes a culture of innovation in companies. But do more women on company boards indicate a meaningful shift towards diverse and inclusive decision-making at firms?


The Egon Zehnder Global Diversity Report 2020 shows that while their numbers have moved higher in the past few years, there are not too many women who chair committees, a mere 11% compared to 27.3% globally. Further exacerbating the situation, studies have also shown that women are less likely to be appointed to key board committees such as compensation or nomination. For instance, a Harvard Business Review study showed that the probability of an independent female director serving on the audit committee was nearly 40% lower than her male counterpart on the same board.

While at the board level, gender diversity is improving, it is less promising at the leadership and middle management levels. “At the entry level, we see a lot of women joining the workforce, but that number drops at the middle level,” Patil points out. “That is because the middle level is when most women end up taking the responsibilities of marriage and motherhood”. The picture is grimmer at the C-suite level. “At Kotak, before I moved to the C level, there was only one woman in the Executive Board,” she says.

Be The Change

Singh believes that the answer to making real difference lies in increasing funding for women-led and diverse businesses. Prior to SheCapital, Singh had founded her own two companies—Mydala and Kinis Software Solutions. However, frustrated with the slow pace of change in the country and abroad, she realised that she had to sit on the other side to make a bigger impact.

“It came to a point where it was just time to put in money where the mouth was. Sometimes, when you’re looking for a change, it’s better to start making that change?” She said that the only way to change the landscape of investing in more women, is to have more women investors.

While historically, women-led businesses have got less funding, people are now realising that it’s more about the business idea and not about the gender. Yet, being in the male-dominated venture capital industry has its own set of challenges.

“I’ve had people come up to me and say, ‘why is this female focused fund needed’,” Singh recalls. Her ultimate hope, she says, is that 10 years from now, things will be more equal and the fund will be defunct. For the time being, though, it is a clear necessity.

Sitting on the other side of the ring, SAP’s Gangadharan and Kotak Life’s Patil are trying to use their executive positions to bring more women to the front. They both agree that mentoring and leadership programmes for women employees in early and mid-level careers are essential.

While Leadership Excellence Acceleration Program (LEAP)—SAP’s year-long programme -- assists women in moving into management positions within the company, at Kotak Life, a Leadership Council board focusing on the agenda of beefing up diversity across the firm has been created, along with a mentorship programme for women in middle management levels.

The pandemic and the shift towards work-from-home are also opening up new roles for women. “Women who stay far off are able to take up opportunities because of remote working,” says Patil. But, ultimately, it boils down to creating a work culture which empowers women to take decisions.

“You need to build a culture on which you can build upon further. You can’t just define some numbers and say we have to achieve that,” says Gangadharan. An example of a step towards the goal is using SAP SuccessFactors, a software solution which offers tools to help discover and minimise unconscious bias so that HR can make better decisions about the workforce.

At Kotak Life, one of the primary apprehensions which Patil came across was the issue of maternity leaves. “When we were talking to leaders, especially from the sales division, they said ‘we are okay to take women. But when a woman goes on maternity leave for eight to nine months, how do I manage?’”, she recalls. Patil then decided to hire temporary workers to fill those gaps and allow women to come back after their maternity leaves.

Gangadharan, on the other hand, believes sensitisation needs to start early, much before the workplace. As a result, SAP supports multiple STEM-related initiatives in colleges and universities such as Girls Who Code, Girl Smarts, Girl Power Tech, TechGirlz, Women in Data Science, and many others.

“It’s not just about studying about new-age technologies but also using them in the context of business. A focused upskilling initiative on new-age tech for the Indian women can take us a long way,” she adds.