Wives appointed to Indian boards
Companies scramble to add female directors as deadline looms
As Indian companies scramble to meet a deadline to appoint women to their boards, some wealthy business owners have a solution that meets the letter if not the intention of the law: appointing their wives.
India’s market regulator, the Securities and Exchange Board of India, has set a final deadline of April 1 for all of the country’s listed companies to name at least one female director. In the 12 months after the SEBI order was announced in February 2014, only 580 companies out of thousands had appointed women, according to local reports. More than 80 appointments were family of company owners.
India’s wealthiest are setting a high-profile example of applying the letter of the law. Mukesh Ambani, the second-richest Indian who heads the petrochemicals to telecoms conglomerate Reliance Industries Ltd., appointed his wife Nita Ambani to the company’s board.
Industrialist Gautam Singhania named his wife Nawaz Singhania as a non-executive director of his company, Raymond Group, one of the world’s largest textile-manufacturing conglomerates. Both women have business experience, though not directly applicable to overseeing a conglomerate.
Globally, women lag far behind men in making their way to top management positions and corporate boards. But the situation is dire in Asia where among the leading economies China tops the list with women making up eight per cent of corporate board directors. Japan with two per cent and South Korea with one per cent are at the bottom of the heap. In India, women are five per cent of directors.
“You can have as many laws put in place, but unless the promoter or the management of the company wants to bring about a change and better governance, there are always ways to comply in letter, but not in spirit,” said Pranav Haldea, managing director of Prime Database, a firm that tracks listed companies.
There are about 9,000 listed companies in India. The Bombay Stock Exchange, which is the biggest Indian bourse, has about 4,200 active member companies. The rest are divided between the NSE and a clutch of smaller regional stock markets.
Experts say while the intention of appointing women was to bring about diversity in the boardroom, naming kin to the board might not add to healthy debate and decision-making since someone close to a powerful figure in the company would be unwilling to challenge them.
Others feel appointing family members should not necessarily be viewed as negative.
With days left to the deadline, there were still about 350 companies on the 1,480-member National Stock Exchange yet to comply with the SEBI requirement. Several state-run companies also have not complied.