New company law gives a big push to gender diversity at workplace

Print Posted Date : 24-Dec-2013 , 08:43:05 am | Posted By CASANSAAR

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Earlier this month, when finance minister P Chidambaram rose to speak at The Economic Times Awards for Corporate Excellence, he started off by counting out the number of women seated in the first three rows. "I must specially thank the five women in the first row, the two in the second row, the five in the third row and all the men who outnumber women," he said. He was trying to underscore the need for gender balance in India.

At the same time, his count - which was at least a notch higher than earlier years - also put the spotlight on the small, but significant progress India Inc achieved in 2013 in gender diversity.

The new company law, passed in 2013, mandates a specified class of companies to have at least one woman on the board. Since this became law in August, dozens of companies are looking to rope in woman directors on their boards. Case in point: Irena Vittal, a former partner at McKinsey, has joined the boards of Axis Bank, GlaxoSmithKline Consumer Healthcare, Godrej Consumer Products, Tata Global BeveragesBSE 0.91 %, Titan and WiproBSE 0.54 % in the past year.

With the new law, many different pieces required to foster gender diversity are now slowly beginning to come together. For example, the Forum for Women in Leadership is working on releasing a women director roster - a list of 150 women ready to take up board responsibilities - sometime in 2014. It has so far mentored over 150 women, from the Aditya Birla Group, GE, KPMG, the Mahindra Group, Microsoft and TCS, among others, and will continue till it trains 2,000 women for board positions.

Separately, a group of 24 India Inc leaders - including M Damodaran, Deepak Parekh and GM Rao, and led by Arun Duggal, the chairman of Shriram Capital and a veteran international banker - are also grooming competent women for broad roles. The programme will create 100 board-ready women by next year, with the first batch of 48 'graduating' by December.

Women already head at least nine banks, five FMCG companies and at least eight IT/ITeS companies. There are at least 7% of women as board members in listed companies in India, but at least 50% of them are family members of the owners, according to data from AVTAR Career Creators, a firm that works in the areas of talent strategy consulting and women's workforce participati.

This year, SBI, the country's largest bank, got its first woman chief in Arundhati Bhattacharya. And the country even got a bank run exclusively by women and for women.

Lower in the hierarchy, several companies, especially MNCs, are aggressively pushing to improve their gender balance, not because it is fashionable, but more because having women at all management levels makes business sense. "We need women for wealth creation and enterprise risk management," says Poonam Barua, founder-chairman of Forum for Women in Leadership and CEO of WILL Forum India. "If you do not put women in top management, you run the risk of not understanding the needs of customers, suppliers, investors and stakeholders."

Saundarya Rajesh, founder-president of AVTAR Career Creators, echoes a similar view. "Studies around the world have shown that those companies that have a greater number of women on their senior management are able to tap into the full spectrum of creativity and innovation," she says.
year for us," says Rajesh. "The Indian woman professional is slowly but surely making her presence felt and having her needs addressed."

That's the good news. But these feel-good headlines do not tell the complete story. "Whatever has been happening in the year is very good, but not sufficient," says K Ramkumar, executive director, ICICI Bank. "We need more women in higher education, more women joining the workforce, more women in frontline sales and manufacturing roles, more women in leadership, and a change in mindset at home and in society."

Citing data from a yet-to-be-released survey by the bank, Ramkumar said the best women-friendly workplaces in India have 35% women at the entry level, 25-30% in the first level (five years experience), 12-15% at the entry level of mid-management (5-10 years of experience) and 5-7% in the senior management (15-20 years of experience). "If in a workplace, senior management has only 5-7% women, how will reservation help?" he asks. "The day we are able to preserve that 35% of women entering the corporate workforce, that day we will not need any reservation."

Data from National Sample Survey Organisation shows a dip in the number of women actively employed in full-time careers in 2013 - women workforce participation fell by 1 percentage point since last year to 24-25%.

According to a recent WILL- KPMG report on balanced boards, 93% of all the board seats of BSE-200 companies are occupied by men. And 93 companies in this set don't have any women on their boards. The survey shows that if one woman was inducted to each of these boards, female representation will grow to 10.9%. In contrast, developed markets like the UK, US and Europe are aiming for 30% women board directors.

"We have sown the seeds of balanced leadership (in 2013). If you don't water it, the seed will remain dormant," says Barua. "It is now up to Corporate India to water the seeds so it blossoms into a strong and robust diversity tree. And I hope to see it blossoming by the end of 2014." (Economic Times)

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