As many as 451 companies listed on the National Stock Exchange (NSE) are yet to appoint women directors on board, even as the Securities and Exchange Board of India’s (Sebi’s) deadline for making such appointments ends in less than two weeks.
According to estimates, nearly one-third of the top 500 listed companies on the Bombay Stock Exchange (BSE) and the NSE do not have any female representation on their boards.
The market regulator had made it mandatory for all listed companies to appoint at least one woman director by October 1, 2014, under corporate governance norms. This was later relaxed to March 31, 2015.
A total of 580 companies have complied with the norms since Sebi issued the circular in February 2014.
Of the 1,479 companies listed on the NSE, 451 do not have any woman member on board, a report by Prime Database has said. At least 30 appointments have to take place approximately every day if all the companies have to comply with Sebi’s requirement, laid down in the new Companies Act.
Earlier this week, the minister of state for finance, Jayant Sinha, said in Parliament that Sebi would take necessary action if required when the deadline ends this month. “Sebi will take necessary action when the compliance position by companies is known after March 31, 2015,” he had said.
“All the companies may not comply by the deadline,” Pranav Haldea, managing director, Prime Database told HT.
Though Sebi has asked stock exchanges to ensure strict adherence to the timeline, experts feel failure to comply with the norms may not ultimately lead to penal action. “The government is putting it across as a governance measure and penal action may not be taken,” KH Vishwanathan, executive director, RSM Astute Consulting, told HT. “These are welfare regulations and the objective is not punitive.”
According to the Prime report, a sizeable chunk of the appointments made by companies to comply with the regulation, have been from women belonging to the respective promoter group.
“If somebody is appointed from the promoter group, they will have the same voice as the promoter,” Haldea said, adding that this defeats the purpose of gender diversity.
“The move will take time to be implemented,” Vishwanathan said, adding that the concept of independent directors also took time to be implemented.
Sebi is also said to have urged the corporate affairs ministry and the Institute of Company Secretaries to inform registered firms and ensuring compliance.