Top PSUs Yet To Appoint Woman Directors, As Per SEBI Guidelines

To ensure gender diversity onboard, market regulator SEBI had directed the private sector companies in India to appoint at least one independent woman director by March 2020. As many as the top 1,000 listed companies were to appoint a woman director but a major chunk of these have failed to do so, even when the deadline is near. The list of companies who haven't yet complied with the directions starts with the PSU giants NTPC, SAIL, BHEL, and COAL India.

Key Takeaways:

• A major chunk of private sector companies have failed to appoint an independent woman director by March 2020, as directed by SEBI in May 2018.
• The list of companies who failed to appoint a woman director includes top PSUs such as NTPC, BHEL, SAIL and COAL India. 
• According to the data by the Department of Public Enterprise, the number of women on payrolls in PSUs dipped to 8.5 percent in 2019 from 10.2 percent in 2017.
• In case the companies fail to comply, a fine of Rs 5,000 will have to be paid by the companies and more stringent actions will be taken against them. 

No Woman Director In The PSU Giants

The situation of gender diversity onboard private sector companies in India can be gauged by the fact that even the top PSUs such as NTPC, SAIL, BHEL, and COAL India have failed to appoint a woman director till now. The companies had two years time from May 2018, when SEBI had directed them to appoint at least one independent woman director.

In 2019, 51 of 500 top companies listed in NSE had failed to appoint a woman director. On this, we spoke to Shalini Kamath, Founder, and CEO, SK Associates. She says, "There is always a lag from legislation change to on-ground change to mindset change. The lag period could take years and decades and that’s what we are witnessing. Having said that, despite the slow pace the trend is in the right direction. I am hopeful, these companies will course-correct too!”

An NTPC Spokesperson spoke to Moneycontrol on why have the PSUs failed in complying with the SEBI directives of appointing a woman director. "At NTPC, the position of woman independent director is vacant since November 16, 2019. As the appointment of directors is made by the Government of India, the company has already written to the administrative ministry in this regard and appointment of woman independent director is likely to be made shortly," the spokesperson said.

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Is One Woman Director Enough To Ensure Gender Diversity?

Some of the top PSUs have successfully appointed a woman director, including the Oil and Natural Gas Corporation, Indian Oil Corporation Limited, Gas Authority of India Limited, Bharat Petroleum Corporation Limited and Power Grid Corporation of India.

However, the woman's representation in these companies is still dismal. According to the data by the Department of Public Enterprise, the number of women on payrolls in PSUs dipped to 8.5 percent in 2019 from 10.2 percent in 2017. Overall, the number of women employees shrunk by 20 percent in two percent, highlighting the ground reality of gender diversity in top firms.

“While this is true that the percentage of women is low in leadership positions, however, there are enough qualified, experienced, senior women in corporate India to sit on the boards of the companies. Two things are essential – the boards have to make themselves attractive for women to find value in being part of them and the companies need to dig into the larger pool rather than chase the same few names. The companies need to make the shift from recognized names to skill-sets and value-add from board members,” adds Shalini Kamath.

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