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A feminine touch to company boards

Preeti Mehra

Richa Mishra

NEW DELHI, July 16

WHAT the political parties and the parliamentarians have lost out, the Department for Company Affairs (DCA) seems on the verge of achieving. In all likelihood, this monsoon session of Parliament the Companies (Second Amendment) Bill, 1999 will include a clause on the reservation of one or two professionally qualified women on a company's board.

``It would bring in gender sensitivity in corporate administration and could have a significant bearing on corporate inclination in the areas of environment, labour, children, etc.,'' says the DCA Secretary, Dr. P.L. Sanjeev Reddy.

He recalls his tenure in the Ministry of Rural Development and points out the success of women's reservations in panchayats _ and the difference women-led panchayats have made. He also made clear that this did not mean the entry of women relatives on the board, for the Companies Act clearly plugs this loophole.

In terms of modalities of reservation of one or two women on the board, he felt that qualified women from among the shareholders could be considered. ``The idea is to force them to look for professionally qualified candidates including CAs and MBAs,'' he says.

However, the apex industry chambers are not keen on a legal provision on this score. Though they concede that, in principle, diversity on the company board is desirable, they are shying away from being legally bound on this issue. They emphasise that it is expertise, knowledge and qualifications that should be the criteria, not gender.

But there are others who wholeheartedly support the move. ``We will go the whole hog behind the proposal,'' says the spokesperson of the National Commission for Women as she points out that the commission would like such a step to be taken for other boar ds as well, including in the governing council for sports, schools, institutes and associations.

She felt that apart from this being a positive move in the direction of gender equity, women bring with them qualities that would help the business environment in the country.

On the macro level, women's representation on company boards is part of the issue of diversity and flexibility of an organisation. ``Apart from women on the board, companies that have a policy to broaden the profile of their company boards benefit in sev eral ways, '' says Ms. Poonam Barua, Director of Public Affairs Management, who is also Regional Director - India for The Conference Board, a global organisation that endeavours to improve the business enterprise system and enhance the contribution of bu siness to society.

To ascertain what Indian companies feel about the diversity issue, (this includes women's representation on company boards), Ms. Barua conducted a small survey whose findings she shared with Business Line.

The questionnaire-based inquiry of seven significant companies in India revealed that the majority of managers in India are not trained to value diversity, except in companies sourcing and operating globally.

She found that the percentage of women managers in companies was never greater than 10 per cent and the demographic profile of the companies was predominantly male (women were mainly in secretarial functions).

``Men have different interests and they tend to brush a lot of issues under the carpet,'' says Dr. Reddy, DCA Secretary, as he states that industry, which today is the prime mover of the economy and the engine of growth for the country, should give women place to blossom and use their perspective for its positive growth.