Transcript Gender Diversity on Board

Gender Diversity on Board
A Global Overview
What is Gender Diversity?
 Gender Diversity means to consider and to promote
different skills, different resources and potentials of
women and men in their diversity as equivalent.
 Board Diversity refer to the presence of women on
corporate board of directors.
 Generally, we can see the male dominated corporate board
in India. In India a gender balanced board is not much
prevalent as in other countries as there is no fixed quota
specified for women representation on the Corporate
Boards.
Need for Board Diversity
 Diversity in Boardrooms assists companies to enhance-
 growth,
 profitability, and
 social responsibility.
International
Overview
Global Board Seats held by Women
Country
% Women
(as on April 9, 2012)
Norway
40.1%
Sweden
27.3%
United States (US)
16.1%
South Africa
15.8%
India
5.3%
Japan
0.9%
Norway
 Norway became the First Country to introduce board
gender quotas in 2005.
 The Norwegian Companies Act provides:No. of Directors on the Board
Quota
2-3
Both gender (male/female) shall be
represented
4-5
At least 2 director from each gender
6-8
At least 3 director from each gender
9
At least 4 director
More than 9
At least 40% director from each gender
Norway…..
 The Public limited companies to meet the requirement of
gender diversity on boards until 1 January, 2008.
 Consequences
of Non-Compliance could result into
dissolution of the company.
 However, no company has been dissolved so far on account
of the non compliance with the gender rules.
Gender Diversity Target by different
countries.
Country
Target for Gender diversity
Norway (2003)
40% by 2008
(Successful in increasing female board
representation by reaching to 40.1% level.)
Spain
(2007)
40% by 2015
(Increased from 5.2% in 2006 to 10.2 in 2010)
Iceland (2010)
40% by 2013
France
20% by 2013 and
40% by 2016
(2010)
Netherlands (2010)
30%
Belgium
 Fixed Quota
The Belgian law on gender diversity provides for which
provide for (minimum 1/3 rd male director and 1/3rd
Female ) has been approved on 28th July, 2011 and published
on 14th September 2011.
This would be applicable to all listed entities.
France
 Fixed Quota
 In January 2011, the French Law was modified and quotas
were introduced in order to improve the representation of
women on boards of both listed and unlisted companies.
 W.e.f. 1st January 2017 Proportion of men and women directors should not be below
40% in case of listed companies and non-listed companies
having revenue or assets over 50 million euros employing at
least 500 persons for three consequtive years.
Malaysia
 30% fixed Quota
 Malaysia mandates 30% women representation
 5 years given to Corporate firms to achieve the target
 This is an extension of earlier govt. policy (2004) for civil
services that resulted in the increased no. of women working
in Govt. Agencies growing from 18.8% to 32.2% at present.
Netherlands
 Fixed Quota ( Comply or Explain Basis)
 A legislative amendment was approved by the Govt. in Dec,
2009 requiring gender Quotas for board members.
 the amended law require at least 30% of Board member to
be male and 30% must be female by 2015.
 The appointment of remaining 40% will be at the discretion
of the Company.
Spain
 In 2007, the Spanish Parliament passed a “law of Equality”
which require listed companies to nominate 40% women to
board seats.
 2015 is the deadline to achieve the target.
 There is no penalty for non-compliance
 Positive approach - rewarding companies those are in
compliance. The Govt. declare that it would take into the
compliance by companies consideration in awarding of
public contracts.
Australia-
No Fixed Quota
 Initiatives to Improve the Gender Diversity –
ASX CG Principles and Recommendations (Comply or Explain)
 Adopt and publicly disclose a diversity policy
 Disclose in Annual Report the proportion of women at
Board/Sr. Mgt/Employee level.
Australia……
 Establish
a measurable objective for achieving
Gender Diversity and assess annually the objective
and progress made which should be disclosed in
the annual report.
 Disclose the mix of skills and diversity criteria
which board is looking to achieve in membership
of the Board.
CANADA
 No fixed Quota
 The Canadian Board Diversity Council (CBDC)
was launched in 2009 with the goal of
Improving gender diversity on Boards.
New Zealand
 No Fixed Quota
 New Listing Rules provides that the all
listed entity would declare the no. of
women they have in senior
management and at Board Level.
Singapore
 No Fixed Quota
Initiatives
 “BoardAgender” is a initiative of Singapore Council of Women’s
Organizations (SCWO)
 It was launched in 2011.
 It aims to provide a forum in Singapore to facilitate the
advancement of more women into the Sr. Leadership Roles and
the Boardroom.
United States
 No fixed Quota
Initiatives:In December, 2009 the SEC approved a rule that would
require disclosure of whether a nominating committee
consider the diversity in finding out directors and if yes they
have to disclose their policy and how it is implemented .
Further the board/nominee committee should also assess
the effectiveness of policy on diversity and disclose the same.
Position in India
Position in India…..
 At present there is no mandatory requirement
to have minimum number of women directors
on the board of a company.
 However, the Companies Bill, 2011 Provides
that the prescribed class or classes of
companies shall have at least one women
director.
Women Director at
TOP 10 Companies of BSE - SENSEX
Name of Company
Total No. of directors
No. of Women Directors
Bajaj Auto
16
1
Bharti Airtel
16
2
BHEL
14
1
CIPLA
9
0
Coal India
13
4
DLF
10
0
GAIL India Ltd.
15
1
HDFC Ltd.
14
1
HDFC Bank
10
1
HERO Moto corp
12
0
129
11
Total
Therefore the total representation of women on the Board of aforesaid
company is 8.52%
Is Quota is the Right Solution to Improved
the Gender Diversity on Board ?
 There is a debate on whether there should be quotas or
companies should be free to decide.
 The Quota can encourage viewing gender diversity as a
compliance issue.
 Like Norway –Created a style of ‘golden skirt’ to achieve the
gender diversity targets.
Possible Solution…….
 There should be gender diversity in the Boardrooms and
companies should be encouraged to have women as board
members.
 Recommendatory Quota can be a solution , which can be
followed on a comply or explain basis approach.
 In India, Gender Diversity can be made part of listing
agreement on a non-mandatory basis like other nonmandatory requirements of clause 49. This will ultimately
focus the issue
Possible Solution…..
 Diversity should be at all level i.e. employee, sr.
management and Board.
 There should be gender diversity policy to promote
it all level.
 As the manpower from sr. management will be a
input for the board position. With diversity at middle
(i.e. employee and sr. management) level a country
can’t achieve the gender diversity at Board level.
Women are better managers when it comes to running
government and their participation lowers corruption as well.
“I have been in active public life for almost sixty years. I can tell
you from my personal experience that whenever there are
women in charge of government, there is good governance and
less corruption. I appeal to women to prepare themselves to
play a greater role in governance in the years to come,”
K Sankaranarayanan- Maharashtra Governor
Source: Business Standard (28.05.2012)
Thank You
Disclaimer Clause: Views expressed in this presentation views of the author do
not necessary reflect those of the Institute.