Indian constitution guarantees gender parity under Article 21; however as the Conclave gathered

for this seminar has gathered; that has not been the practical reality. I, along with my co-author,

Shreya Mathur, delved into another tangent of a legislative effort to appease the publicly voiced

liberal feminist principles.

Companies Act, 2013 took a revolutionary step by mandating listed public companies under S.

149 to have atleast one woman director. As long as the company’s minimum paid up share cap

was 100 crore or a reported turnover of 300 crore. Even though applaud worthy, and you might

be wondering why we are criticizing such a novel attempt at bringing gender consciousness in

the corporate world and breaking the glass ceiling; however, we contend that the mandate cap of

one woman director per listed company will actually make matters worse. In essence, the

hypothesis of the paper remains that the presence of one woman director on a listed company is

minimalistic and largely symbolic.

If the panelist permits, I’d like to engage the audience a little. If you were to guess a ballpark

figure in percentage, what percentage do you think would woman constitute in the Board of

Directors in all listed companies?

Standard Chartered Bank – 2010 – 5.3%

Women on Boards(Biz Divas & Khaitan) 2013 – 6.81% - 350/8990 directors

Jurisdictional Comparison:

Norway 40; Sweden 27, finland 26.8, UK 20.7, France 18.3 Canada 12, Ireland 1, Spain 10.8,

Newzealnd 9.8, Switzerland 8.56

India is 6.81% if it is a conservative figure. Sad reality suggests that it has become stagnant at 5

despite the penalizing provision to 149. 50,000 to 5 lakhs regulated by listing agreement.

India ranks second lowest on G20 economies and 124/136 in matters of economic participation.

(Report by aid group OxFam) The contention against the complete removal of this mandate is

that the effectiveness of a board depends on the coalescence of the right combination of skill sets

and members. Balances on the thread of finding a woman with the right attributes. The negation

to this argument suggests glass ceiling theory. The authors argue further in the paper itself.

Arguments against the provision

Frank Dobbin, sociologist at Harvard – studied that mandating gender parity causes more

harm and negative effect because the parity is being promoted not by free will but by the

mandate of law. Affirmative action has also given congruent results.

The Economic Times – 10th June’14 – Relatives or high social standing woman made

directors. Only 4% of all directors are women. 2 indian companies on fortune 500 – 1/30

directors was woman

Quota system has gathered a lot of criticism. Trophy Directors – Erosion of shareholder

value – will go against meritocracy. Norway – 40% by 2008 – or find delisted and

dissolved. Italy, france and spain followed model. Matsa & Miller noted decrease in

profitability and productivity of these corporations.

Only to seem inclusive of diversity to avoid litigation. USA employs different minorities

so that no negative light.

By putting them into the claws of tokenism, making them more unempowered. WHY?

o Pitted against all male dominated board. Pre-existing sex bias. Studies show that

qualifications, experience, leadership do not prevent tokenism.

o Scrutiny and Criticism: de facto construed as lesser talent w/o taking into account

her qualifications. Attributes highlighted overemphasized.

o Not evaluated and appraised as men. Autocratic leadership by man may be taken

in positive light but would have negative reviews if done by woman.

o Reputational harm, financial loss, time as they have to strive harder. Qualified

woman may not also consent to be on BoD because of all these problems.

One woman amongst 12 men will lead to tokenism and subsequent sub-optimal

functioning of the board.

CONCLUSION – A matter of serious debate and academic furore. No conclusive answer.

WE cannot have reservation on BOD because of detriment to shareholder value. BUT S

E Asch – Effect of Group pressure on modification and distortion of judgment – 1951 –

Carnegie press – 3 individuals unanimous decision – inevitable psychological pressure to

conformity. Tried on 317 Norwegian Companies. Known as the Critical Mass theory.

Implementation in India should only be extended to three and not more. India suffers

from a plagued law. Caste – based Affirmative action is an example. We are the

controllers of law, and not the other way round. Humble suggestion – only three.

Thank you.