Companies may not be mandated to have 20% women on their boards, though the government said that in spirit firms must work towards it. The provision, likely to be incorporated in the new Companies Bill, would be in the form of a recommendation.
A senior government official told Hindustan Times that it would be difficult to mandate companies at this juncture to have 20% women on their boards.
Industry chambers have said having more women on boards is desirable but making it mandatory may not be feasible.
Naina Lal Kidwai, country head, HSBC Bank and vice president Ficci said that the proposal to reserve 20% seat on company boards for women is a move in the right direction but it should not be mandatory and executive members on the board must be based on merit.
"It is extremely important to be proactive in increasing the number of women on company boards but reservation may not be appropriate, it should be more a guideline to encourage best practice," Kidwai said when asked about the issue.
About 70% of Indian companies do not have any woman as board members.
Kiran Mazumdar Shaw, CMD, Biocon Ltd said that the government must lead the movement to empower women. "The private sector must have the flexibility though it must be kept in mind that more women should be given their due and brought in the radar for top posts. It must be driven by the government especially for the public sector enterprises," she told HT.
Earlier, the corporate affairs ministry said that companies with five or more members on their boards must have at least one woman director.