Women’s participation in corporate boards goes beyond concepts of gender diversity, empowerment or inclusion. It is one of the most pertinent strategies for better corporate governance.
European countries lead in appointing women as directors on a company’s board. Recently the European Union (EU) states have set the ball rolling. They’ve given initial approval to a directive requiring firms listed on EU stock exchanges to appoint women for at least 40 per cent of non-executive director roles and 33 per cent of all board jobs by 2027. Norway has taken lead with 45 per cent representation of women. In India, there’s only 4.7 per cent representation. So that means there’s plenty of room for scaling women’s representation in corporate boardrooms.
“Women’s participation in the boardroom doesn’t really need any law enforcement and should happen automatically,” says Asish K Bhattacharyya, founder and managing director of executive training business Nonlinear Insights. “Over the last two decades women have climbed the corporate ladder and have occupied senior executive positions. Hence competence is not the issue; instead, it’s about giving them opportunities,” he said at Assocham’s Boardroom Impact Talk Series – 2022, held virtually.
The community of women working in the corporate workforce is growing and many have broken the proverbial glass ceiling. The fact that women need to go beyond senior positions and steward boardroom decisions needs a tectonic shift in cultural outlook and ethos. “There have been changes in corporate governance. Further evolution of good governance should include women. Every board requires at least one woman. Though women directors perform the same role as that of their male counterparts, their very presence speaks of diversity. Given this stance it would be great if there is more than one woman at the top. This brings in diversity in parameters like age, experience and location,” added Basudev Mukherjee, assistant secretary general, Assocham.
Now what does this diversity do? A balanced leadership team with equitable representation of women on board is essential. Gender-diverse boards could lead to informed decision-making and innovative strategies. The participation of women in boards could make a difference. Women juggle roles. Their multi-tasking ability gives them a fairly broad perspective of things. This can be understood in the finer nuances that they bring to the table. “Women are more sensitive to social issues. I recall an instance when a lower level employee died in an accident. The board members were discussing the compensation that needs to be given to the family of the deceased. The only woman board member felt that something could be done for the family,” remembered Bhattacharyya.
Then how do we build a gender-neutral workforce through which women could make it to the boardroom? May be it’s not a bad idea to have a bottom-up approach and start at the base of the pyramid. Basically the need is to build a corporate future with women playing a role at every level of the ladder.
To digress, auto companies are inculcating gender inclusivity by inducting women onto the shop floors. There’s a belief that women can’t lift heavy weights, but today many stages of the production are automated. Consequently, women can work well on processes that require motor skills and monitoring robotic functions.
Other manufacturing units are also re-thinking their hiring strategy to include women at the shop floors and assembly units. It’s accepted that women have an eye for detail and make keen observers. Who knows, with dexterity and determination, the shop-floor responsibilities may lead such women towards managerial positions? Hopefully some of these women may work their way to top boards.
“To have corporate boards with women as decision-makers requires a change in mind-set. It calls for objectivity and maturity. Then what comes to mind is whether it is enough to have just one woman board member. No, it’s not enough, because women bring in pragmatism and empathy, and a critical mass of at least three women may help to be heard aloud. It’s a multiplier effect,” explained Dr Ashok Haldia, chairman of the Assocham Task Force on Accounting Standards, Sustainability Accounting and Integrated Financial Reporting.
An ecosystem needs to be created for women to overcome inhibitions and voice themselves. Enablers could be in the form of an inclusive workplace. Fair and objective compensation measures may also help. Diversity and inclusive programmes could be incorporated into the company’s agenda. Policies may also help in creating a transparent level playing field.
“For women to reach the board level, it’s important that motivation and opportunities begin from the recruitment stage,” reasoned Dr Aruna Sharma, former secretary of the Ministry of Electronics and IT, Government of India; former steel secretary and former member of digitisation committee of Reserve Bank of India.“By doing so,” she noted, “women can take managerial roles and move step by step towards the director’s cabin. The person who helms the company should not be differentiated based on gender, or else it could lead to gaps in the system. Therefore a neutral approach may be necessary.”
If women have voting rights on a par with men, they should be given an equal chance to occupy top positions in organisations through enabling mechanisms. Government introduced quotas in countries such as France have helped increase the community of women in boardrooms. Though the percentage of women on corporate boards in India is low, one hopes that women-centric strategies are chalked out to increase their participation in boardroom decisions.
Sign up to the E&T News e-mail to get great stories like this delivered to your inbox every day.
Original Source: https://eandt.theiet.org/content/articles/2022/09/view-from-india-gender-quotient-needs-to-scale-up-for-boardroom-diversity/