Government-owned companies are among the big names that are still defaulting on the rule to have at least one woman on the board of directors.
There are 57 companies on the National Stock Exchange (NSE) that have yet to appoint a single woman on their board, according to Prime Database. A little over a third are public sector undertakings (PSUs), including blue-chip names like Oil and Natural Gas Corp, Indian Oil, and GAIL India.
The Securities and Exchange Board of India (Sebi) had a little over a year before it directed that the boards of all listed entities must have at least one woman, by March 31.
Pavan Kumar Vijay, founder and managing director, Corporate Professionals, says many state-owned entities haven’t complied as their parent ministries are yet to make the appointments.
Shriram Subramanian, managing director, Ingovern, says PSUs generally tend to be lax in their approach. “The government has to take things seriously and not expect only corporate India to comply. PSUs have to lead the way,” he said.
"The objective of the requirement is to address the under-representation of women in corporate governance leadership. To achieve this objective, law and punishment cannot be the measure. We have only thrown a law at the problem rather than address the underlying issues — for example, mandating paternity leave, providing an enforcement mechanism against gender discrimination at the workplace and the like.”
Somasekhar Sundaresan, partner, J Sagar Associates
Analysts say non-compliance with corporate law sends a wrong signal to the investor community and discourages foreign investors. And, non-compliance by PSUs makes it challenging for the regulator to enforce rules on other companies.
J N Gupta, co-founder and managing director, Stakeholder Empowerment Services, says, “Things will happen only when there is public pressure, since nobody is bothered.”
Among the notable private entities that still have vacancies for women directors are Tata Power, Lanco Infratech, and DB Corp. The list of non-compliant companies swells if one includes BSE-listed and unlisted companies. According to a report quoting the minister of corporate affairs, there were 2,000 listed and unlisted companies in early December which had not appointed a woman director.
“Prosecution has been launched against 121 defaulting unlisted companies (other than PSUs)," minister Arun Jaitley had said in a written reply to the Lok Sabha in December.
A Sebi circular dated April 8, 2015, says companies that violate the norms will attract a monetary penalty. Those that complied after April 1 and before June 30, 2015, were to be fined just Rs 50,000.
Those complying between July 1 and September 30 would have to pay Rs 50,000, along with an additional Rs 1,000 per day till the date of compliance. Those doing so on or after October 1 would be slapped a fine of Rs 142,000, in addition to Rs 5,000 a day till the date of compliance.
"Unless the punishment is meted out, it will not work. The government has to follow the rules and the non-compliance should be traced to individuals, not only to the company,” said Gupta.