Listed companies rush to appoint women directors in India.
"Unfortunately, the law is weak and there is no requirement to appoint independent women directors," Prithvi Haldea, chairman of Prime Database.
Mumbai -- Indian companies listed on the stock exchanges rushed to appoint women directors on their boards on Tuesday, the last date before a deadline set by the market regulator kicks in.
But many of the women directors who were appointed were wives, daughters and sisters of the promoters, defeating the very purpose of the directive of the Securities and Exchange Board of India, or Sebi, which was to encourage gender diversity and independence on the boards.
"Unfortunately, the law is weak and there is no requirement to appoint independent women directors," Prithvi Haldea, chairman of Prime Database, a leading securities database management company, told Khaleej Times on Tuesday.
"This has resulted in many companies appointing the wives and daughters of promoters on their boards. The objective of ensuring gender diversity is defeated."
Last June, Reliance Industries appointed Nita Ambani, wife of chairman Mukesh Ambani, as the first woman director on its board, in a move to meet the Sebi requirement.
"Nita has been engaged in several initiatives that have strengthened Reliance, right from building the world-class township and the ecological development at Jamnagar, next-generation office campuses, designing customer touch points of Reliance Retail, healthcare initiatives, successfully setting up and running institutions such as Dhirubhai Ambani International School and Mumbai Indians to, most importantly, managing Reliance Foundation," Ambani on his wife's appointment in June 2014.
The capital markets watchdog had in February directed listed companies to appoint at least one woman director on their board by October 2014. The Sebi later extended the deadline to March 31. Many of the over 1,450 listed companies on the National Stock Exchange were hoping for an extension of the deadline and had not appointed women on their boards.
However, with the Sebi refusing to extend the deadline, there was a rush on Monday to appoint women. About 200 women directors were appointed on the last day, mostly relatives of promoters.
UK Sinha, the Sebi chief, condemned the delay in appointing women as directors. He also warned of strict action against companies failing to do so.
While the market regulator has not specified the penalty -- it can impose a fine of up to Rs250 million, which it is unlikely to do -- listed companies have taken serious note of the warning.
But why did the companies wait until the last moment? Is there a shortage of women directors in India? Haldea says it is not difficult to select about over 1,400 women professionals to be inducted on to the boards of companies.
Since the Sebi has not specified any minimum qualifications or experience, companies could have chosen women with a non-financial background, including those from human resources or market research, or even from the non-corporate sector.
Copyright 2015 Khaleej Times. All Rights Reserved. Provided by SyndiGate Media Inc. ( Syndigate.info ).
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|Publication:||Khaleej Times (Dubai, United Arab Emirates)|
|Date:||Mar 31, 2015|
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