Rationale for having a Woman Director on a Company's Board

The rationale for having a Woman Director on a Company’s Board

Online CS Professional Classes: Although the Constitution of India has granted men and women equal rights, we still find that the employment of women is not preferred. Thus, opportunities for women are limited eg. Women are not preferred in the Army / Air Force in certain areas like combat field, in flying zones. But today the scenario has changed. You find women employed as pilots flying aircraft, occupying top posts in many posts in many companies be it a manufacturing sector or banking / financial sector. Women have also entered the Boardrooms of many companies of course in a limited way.

Our laws also have conferred many privileges or protection or relaxed provisions considering the fact that women are disadvantaged in some ways. In this scenario, Companies Act 2013 has made a provision for employing women directors on the Boards of a certain class of companies and this is a welcome move. Thus, the article focuses on the issue of representation of women directors on the board and its effect.

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It is quite interesting to note certain facts about women directors from the statistics. According to ‘Catalyst’, a nonprofit research organization in America, many of the fortune 500 companies which have the highest representation of women directors on board have achieved better financial performance than those have less representation of women directors on board. Yes, 45 directors held about 17% of the board seats of fortune 500 companies in the year 2012. In the UK, it is 19%. In Norway, it is surprisingly 41%. In India, it is roughly 7% of the directors of listed companies in which is a very dismal percentage. The thrust given by the New ad – 2013 is certainly going to help in improving the representation of women directors on the Board.

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