Breaching The Boys’ Club

Context: Critical analysis of the performance of the gender quota policy (At least one woman on board) for corporate boards, mandated under Indian Companies Act, 2013.

Positive aspects of the policy: Indian Companies Act, 2013 mandated the presence of at least one woman on boards of public and private companies that meet a certain threshold of paid-up capital or turnover.

• It was aimed at redressing the long history of overt and covert discrimination women face to reach the upper echelons of companies.
• Spillover effects: It was believed that once hired, female directors may be able to improve gender balance at other levels in companies through their networks and advocacy.
• Resulted in higher women representation: 55% of companies did not have any woman on their board before quota regulation, whereas after regulation, 100% of companies complied with the law.
• Initiated substantive changes:
  • About a third of companies have two or more women on their boards, post-quota.
  • New female hires also have a higher number of qualifications and a higher probability of having advanced degrees compared to their male counterparts.
  • 61% of companies prioritized appointing women with previous experience in senior executive positions, as opposed to women with familial ties.

Criticisms of the policy

• Anti-meritocratic: As it puts gender over merit in board appointments.
• Symbolic female appointments: 5% of companies only met the lowest threshold required by the quota of appointing one woman on board.
  • There is a continuance of rigid corporate work culture that relies on old boys’ clubs for director-level recruitment, male-heavy networks of existing board members etc.
• Reinforcing fiefdoms: One-fifth of companies appointing at least one woman have familial ties to their board.
• Discrimination in the role: Women directors are often sidelined in committees like nomination committees that are responsible for director- and executive-level recruitment.
• No positive spillovers: In the form of recruitment of more women at lower levels.

Way forward

• Improving transparency and reporting standards of board-level appointments: Holding firms accountable through regulatory scrutiny.
• Shifting focus towards eliminating systemic gender biases in leadership by a change in attitude, as opposed to token adherence to the laid down criteria of quota regulations, may bring about actual intended diversification.
• Address equality beyond the gender realm: Evidence suggests that other demographic groups based on caste, religion, sexual orientation, etc., also face strong career barriers.