A study of listed companies conducted by India’s leading bourse National Stock Exchange of India (NSE) has shown that companies with multiple woman directors have performed better.
NSE has taken up the issue of gender diversity in boards with listed companies. It has issued notices to 115 active listed companies to include women directors on board.
The study shows that about 88% of the companies seem to have complied with the Securities and Exchange Board of India (SEBI) directive among the NSE listed companies.
In compliance with the SEBI directive NSE has issued notices to 260 companies (this includes suspended companies) who have not complied so far. With some companies replying, rest are at various stages of evaluation. Out of these companies 145 are in the suspended companies while rest are active. After serving these notices recently, one has already complied while many are expected to follow.
The study was undertaken in association with Prof N Balasubramanian, Adjunct Professor, Indian Institute of Management (IIM)– Ahmedabad. The study has revealed that 1186 companies have women directors on board out of 1451 as on 1 April 2015. Covered companies are those which were mandated to have women directors and for which women directors’ data is available.
In case the companies remain non compliant, as per SEBI circular dated April 08, 2015, the exchanges are advised to levy fines on listed companies for non-compliance with the requirement of Clause 49 II (A) (1) i.e. non appointment of woman director on quarterly basis . As mentioned, NSE has already issued notices to non-compliant companies.
Generally, there is a business case for gender diversity in the boards. It can have few key dimensions, like, increasing board effectiveness, augmenting company performances etc among others. It is revealed that regulatory mandates accompanied by awareness programs help achieving a better ratio. The study has also revealed that Norway has made the best progress. Among the BRICS nations, South Africa leads the group with 17.6%, while Brazil is lagging at 5.3% and India is placed with 9.5% women director.
About NSE: In its 20 year history, NSE has transformed the capital market, based on technology, innovation, high standards of governance and management practices. NSE’s business practices and high levels of integrity have earned it the trust of the financial markets worldwide. Besides being a platform of choice for all exchange traded financial products In India, NSE’s flagship index, the Nifty 50, has become a benchmark national level economic parameter.