PGPM (2013-15), Section A

Anirudh Krishnan (13P006)

Deepak Sasikumar (13P019)
Piyush Rathi (13P033)
Sandeep Banthia (13P042)
Suhail Sabharwal (13P049)
Sunanda Mohanty (13P051)


Under the guidance of
Prof. C. L. Bansal
Introduction
What is Gender Diversity and why is it needed?
International Perspective
Indian Context
Implication and Recommendation



Provisions in Companies Bill, 2012
Section 149
Bearing on the Indian corporate scenario
Questions to be answered
Need for women directors
The quota system
Ethical
Equity
Equality
Parity
Diversity
Opportunity
Gender Diversity means to consider and
promote different skills, resources and
potentials of women and men in their diversity
as equivalent

It is the ability to accept both genders equally
within an organization, providing both men
and women with same compensation, benefits
and opportunities based on their skills
Women received only 80% of their male
counterparts salary and were easily passed over
for promotions
Glass Ceiling Invisible barrier that keeps
women from rising above a specific level within
a company
Women were not considered for partner track as
it was believed that their domestic commitments
would make them poor partners

Female directors enhance board independence (Fondas &
Sassalos, 2000)

Women take their non-executive director roles more
seriously, and are better prepared for meeting (Izraeli, 2000)

Women ask the awkward questions more often which helps
board think more about their decisions (Huse & Solberg, 2006)

Women bring different perspectives and voices to the table,
to the debate and to the decisions (Zelechowski & Bilimoria, 2004)

Country % Women on Board
(as on April 9, 2012)
Norway 40.1%
Sweden 27.3%
United States (US) 16.1%
South Africa 15.8%
India 5.3%
Japan 0.9%
First country to introduce board gender
quotas in 2005

No. of Directors on the
Board
Quota
2-3
Both gender (male/female) shall be
represented
4-5 At least 2 director from each gender
6-8 At least 3 director from each gender
9 At least 4 director
More than 9 At least 40% director from each gender
The Public limited companies to meet the
requirement of gender diversity on boards
until 1 January, 2008.

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.

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 2017-
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 consecutive years.

Country Target 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 2017
Netherlands
(2010)
30%
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.

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.

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.
Study of 30 companies in Bombay Stock
Exchange (BSE) and 50 companies in Nifty
shows the number of women directors to be
5.9% and 4.5% respectively
Low percentage in the global context
The Companies Bill 2012 provides that the
class or classes of companies as prescribed
shall have at least one woman director. These
classes have not been defined as yet.
Quotas are a blunt tool Power allocation on the
basis of gender rather than merit

Neither good for corporate governance nor for
organizational performance

Companies Bill 2012 does not promote
membership by virtue of competence, skill and
success by imposing women participation

Leads to participation on multiple boards but in
non-executive roles

There should not be just a quota system

Corporate models from the Australia and USA should
be emulated

Companies should consider:

Diversity in identifying nominees for director

If the nominating committee or the board even has a policy
with regard to diversity

Mandatory disclosure of how these policies are
implemented and how the nominating committee or the
board assesses the effectiveness of its policy