A Global Overview Gender Diversity on Board

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) Norway40.1% Sweden27.3% United States (US)16.1% South Africa15.8% India5.3% Japan0.9%

Norway Norway became the First Country to introduce board gender quotas in The Norwegian Companies Act provides:- No. of Directors on the BoardQuota 2-3Both gender (male/female) shall be represented 4-5At least 2 director from each gender 6-8At least 3 director from each gender 9At least 4 director More than 9At least 40% director from each gender

Norway….. The Public limited companies to meet the requirement of gender diversity on boards until 1 January, 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. CountryTarget 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 (2010)20% by 2013 and 40% by 2016 Netherlands (2010)30%

Belgium Fixed Quota The Belgian law on gender diversity provides for which provide for (minimum 1/3 rd male director and 1/3 rd Female ) has been approved on 28 th July, 2011 and published on 14 th September 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. 1 st January 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 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 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 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 directorsNo. of Women Directors Bajaj Auto161 Bharti Airtel162 BHEL141 CIPLA90 Coal India134 DLF100 GAIL India Ltd.151 HDFC Ltd.141 HDFC Bank101 HERO Moto corp120 Total12911 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 non- mandatory 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 ( )

Thank You Disclaimer Clause: Views expressed in this presentation views of the author do not necessary reflect those of the Institute.