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India Inc picks women relatives to meet boardroom quotas

india Updated: Jun 18, 2014 10:47 IST

Confronted by a new law aimed at addressing the widespread absence of women from India's boardrooms, the country's richest businessman decided he knew just the woman for the job -- his wife.

Nita Ambani, best known for her skyscraper family mansion, is due to be voted in Wednesday as a director of her husband Mukesh's giant conglomerate Reliance Industries -- one of several firms opting for female relatives over outsider talent.

The law, passed last year and with varying deadlines for firms depending on turnover, aims to boost gender diversity at the top by insisting on at least one woman in the boardroom of listed companies.

But analysts say the lack of outsiders breaking through the glass ceiling is unsurprising in a country that regularly ranks near the bottom of surveys on women in the workplace.

"My firm has been head-hunting for over a decade and I have not had businesses actually looking to hire women from outside the ranks for board positions," said Mahalakshmi, the head of the Mumbai-based Professionele Consulting, who uses only one name.

"Businesses would want someone whom they can influence and ensure conformity in the board," she added.

India's treatment of women has been in the international spotlight since late 2012 when the fatal gang-rape of a young student in the capital New Delhi sparked outrage over sexual abuse and gender inequality.

Although new Prime Minister Narendra Modi has pleasantly surprised activists by putting women in more than a quarter of his cabinet posts, a sharp increase on the last government, analysis of the wider Indian workplace shows there is a long way to go.

Dismal gender equality ranking

Women make up roughly 50% of India's population of 1.2 billion, but in terms of female labour participation it ranks a dismal 120th among the 131 nations surveyed by International Labour Organisation in 2013.

Credit Suisse's Global Gender Gap 2013 ranked India at 101 out of 136 countries and found that only nine percent of the firms surveyed had women as part-owners.

The "perception hurdle" of male-dominated Indian corporates rather than any lack of business sense among women is keeping true talent away, said Kiran Mazumdar Shaw, the founder and head of Biocon, a leading name in India's biotech sector.

"There is an ecosystem geared towards negative selection that excludes women. The job criteria are fashioned out in such a way that only men will make it to the short list," 61-year-old Shaw told AFP.

"So while a company advertises for talented risk-takers on one hand, the board is actually risk-averse and steeped in convention when it comes to allowing women to join their ranks."

Shaw said she too struggled against the same "credibility issues" when she started Biocon 36 years ago but she kept pushing on until better days came.

In some cases women themselves are hesitant to step forward, say analysts, for fear of being a token female face in the boardroom -- expected to rubber stamp decisions rather than bring any fresh perspective.

Padmaja Alaganandan, who advises on human resources at consultancy PricewaterhouseCoopers, said women were worried about being promoted for their gender rather than talent and "whether their voices will be even heard".

As a result, it has been easier for companies to select "known faces" from a small group of women who have already made it in the business world -- or, as recent moves have shown, family members.

Since the new law was passed, other well-known companies turning to female relatives for their boardroom positions include the fabric and fashion retailer Raymond Group, cigarettes-to-soap conglomerate Modi Group and Century Textiles and Industries.

Other than her enthusiastic co-ownership of the Mumbai Indians cricket team, Nita Ambani's business experience is limited and her most celebrated achievement is creating the "world's priciest home", a 27-storey edifice that dominates the city's skyline.

Shaw feels a possible solution to the complex issue lies in making suitable amendments to the new regulations.

"The law should mandate the appointment of independent women directors. Female family members being appointed on boards to be compliant is not in keeping with the spirit of the intent," she said.

Another suggested step while waiting for changes in the law is to expand forums that groom talented corporate women for board roles, and increase the number of support groups.

"We need to fight," said Shaw.