Number of women on boards of Indian companies doubles, but still negligible

According to a study of the Bloomberg data on the gender composition of boards of 91 companies on the BSE-100 index, the median number of women on Indian boards has doubled during the last five years. However, that number is still negligible; two in 2018-19, as compared to one, five years ago. Similarly, women accounted for median 10 per cent of the board at the time, which has increased to only 14 per cent, today.

This shows that India Inc is still far behind the US in terms of gender diversity on boards. As per the 2018 US Spencer Stuart Board Index, women account for almost one-fourth of the directors of S&P 500 companies, with an average of 2.6 female directors on each board. While two or more women hold the position of directors at 87 per cent of S&P 500 companies, the number is only 54 per cent on Indian boards.

Apollo Hospitals possesses the most gender-diversified board on the BSE-100 index, made up of 42 per cent women, ONGC has the least diversified board, with only 6 per cent women. Public sector undertakings (PSUs) continue to be the slowest in improving the diversity of their boards, with four of the top ten BSE-100 companies having the worst diversity ratios at the board level in FY19. The Bajaj group companies, including Bajaj Auto and Bajaj Finance, is also on this list.

Despite the urgent call for global diversity on boards, a number of companies like Tata Global Beverages, Titan, Axis Bank, LIC Housing Finance, and HDFC Bank, have instead, seen an erosion of diversity on their boards, over the last five financial years.

It appears that almost one-fourth of the BSE-100 companies are only ensuring the presence of a woman director on the board for the sake of the minimum compliance of the Companies Act, 2013. As evidence to this, out of the 91 companies on the index, 24 have consistently had only a single woman director, for the last five years.

However, trends show that companies which have the highest gender diversity ratio are currently the market leaders, or feature among the leading players in the Indian industrial landscape. While Apollo Hospitals is the largest private sector hospital chain in India, Godrej Consumer Products is a market leader in household insecticides and the second largest marketer of soaps in the country. Similarly, UltraTech Cement, Cipla, and Infosys, are each market leaders in their corresponding industries.