Women form a significant part of the workforce in India and, like other Asian countries, their representation in executive positions in the corporate sector, especially at the boardroom level, is abysmal. Despite a growing consciousness on gender equality, this issue has yet to catch the public eye in India. There is very little political or social discourse on providing impetus to women's participation in corporate governance and the issue is not a priority item on the national governance agenda.
Studies suggest that the number of women on corporate boards in India is around 5.3 percent.1 Of the 1,112 directorships of companies listed on the Bombay Stock Exchange, a mere 59 are held by women.2 Further, many of these occupy their positions by virtue of their kinship, owing to the predominance of family-owned businesses in India, and not by virtue of their professional capabilities. Therefore, these women directors have little say in the shaping of the board’s decision making or in the management of the company.
The reasons for this disparity are manifold, but they predominantly revolve around cultural perceptions and social norms prevalent in India. Women have historically been associated with the roles of domiciliary support while the man has been the bread winner. With time, these gender roles have subtly evolved into stereotypes, resulting in clear prejudice against women looking to rise up the corporate ladder. Gender disparity in boardrooms is also to a large extent attributable to the current sex ratio and the low female literacy rate,3 both of which have their roots in the stereotypical perception of women in Indian society. These gender roles also account for women losing out mid-career due to marital and maternal obligations. The perceptions and norms do not merely impact the mindset of the society at large, but also have a trickle-down effect on institutions that are relatively insulated from them. For instance, most multinational companies bringing international practices to India face challenges due to the small pool of talented women candidates to choose from for boardroom and senior managerial positions.
While this 'glass ceiling effect' seems like a phenomenon across the globe, the rigid cultural perceptions and social norms in the Indian society make this more impeding here than elsewhere.
The Indian Constitution has been more progressive in the treatment of women than many other national constitutions, including providing an equal right to vote for women long before the right was available in some developed countries. It also enshrines principles of gender equality and makes it incumbent on the State to adopt affirmative measures to ensure equality of status and opportunity of women. Ever since the adoption of the Indian Constitution, the Indian government has taken various measures toward empowering women and providing impetus to the representation of women in public life. These measures include a quota for women in local governing bodies, legislative reform of the personal laws, etc.
India has also demonstrated its earnestness in fulfilling its international obligations regarding women’s rights. India was one of the first countries to sign the Convention on Eliminating All Forms of Discrimination Against Women (known as CEDAW), following which a number of policy and legislative reforms have been adopted by the government for the emancipation of women. However, the implementation of these policy and legislative measures continues to remain a challenge. In pursuit of its obligations under CEDAW, the government is currently considering enacting an exhaustive legislation providing for remedy, redressal, and penal action against discriminatory practices.4
With a male dominated workplace and increasing numbers of women joining the workforce, workplace sexual harassment has emerged as a major problem encountered by women in India. The Supreme Court of India took note of this issue as early as 1997, when a landmark judgment5 laid down the policy to be adopted by employers to combat this issue. However, the directions of the Supreme Court received an apathetic response from employers, including the public sector enterprises, and the level of compliance with these guidelines was disappointing. In view of the growing demand from civil society organizations and social media for detailed legislation on the subject, the Indian Parliament recently passed the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The legislation seeks to prevent and redress grievances pertaining to sexual harassment in the workplace. Despite the fact that the introduction of the legislation has received criticism from various quarters for being too little and too late, it is definitely a positive step that will go a long way in improving work conditions and ensuring a safe and healthy work environment for women.
With the view to reform various provisions of the existing law, especially relating to corporate governance, the lower house of the Indian Parliament has recently passed the Companies Bill, 2012 (Companies Bill) and it is soon expected to become law. As part of the measures to improve corporate governance, a provision regarding mandatory appointment of women directors was introduced in the Companies Bill. The provision requires certain prescribed classes of companies (which are yet to be indentified by the government) to have at least one women director on their board of directors. While the Parliamentary Standing Committee on Finance expressed its concern regarding practicality of the provision, especially due to the limited talent pool, the Securities and Exchange Board of India (the Indian capital markets regulator) has lauded the government's effort in introducing quota for women on corporate boards. The government's response has so far been progressive and the government has made it clear that provisions such as these "will make the companies more alive to giving salience to the female gender in the realm of corporate governance."6 While it remains to be seen what classes of companies are brought within the ambit of this provision, it is expected that the majority of listed companies will be covered. A possible challenge then would be to identify a sufficient number of women capable of occupying boardroom positions allocated for women directors.
Apart from the proposed provisions in the Companies Bill, there is hardly any requirement under the Indian regulatory framework providing impetus to the participation of women in corporate governance. However, certain measures in the current law, such as the restriction on the number of boards an individual can be appointed to, go a long way in attracting a fresh talent pool, thus providing greater access and opportunity for women directors.
Recent cases of sexual violence against women have provoked nationwide protests and have prompted the government to introduce legislative and policy reforms on a spectrum of issues relating to the safety of women, especially in the work environment. However, the implementation and enforcement of these reforms continue to be the primary challenge in improving the living and working conditions of women in the society.
In the Indian context, quotas for women in employment appear to be the most effective way to overcome the cultural and social barriers. While the mandatory quota for women on corporate boards will compel corporate houses to look out for potential women candidates for their boardroom positions, it is imperative that they realize the need to harness the economic productivity of women and ensure that implementation of the policy is not reduced to mere lip service. In spite of a strong glass ceiling effect, in recent years, India has seen considerable growth in the emergence of women entrepreneurs. According to a study by EMI Partners International, 11 percent of large Indian corporations have women CEOs as compared to 3 percent in Fortune 500 companies in the US.7 Statistics in the emerging sectors, such as banking and finance, have been particularly remarkable presumably because of the stable and favorable working conditions for women offered by these sectors. Success stories of women occupying top positions in the corporate sector will certainly inspire women seeking to break the glass ceiling and reach the apex of the corporate pyramid.