Government finds it difficult to appoint women directors: Nirmala Sitharaman

All the listed companies had to appoint one within a year, and others reporting minimum revenue of Rs 300 crore had three years to comply

jasleen

Jasleen Kaur | October 6, 2016 | New Delhi


#women directors   #SEBI   #FICCI   #Nirmala Sitharaman   #Companies Act  
Government finds it difficult to appoint women directors: Nirmala Sitharaman
Photo: Arun Kumar

 The government is finding it extremely difficult to appoint women on boards of companies, said minister of state for commerce and industry Nirmala Sitharaman.

Addressing a gathering of women entrepreneurs at Federation of Indian Chambers of Commerce and Industry (FICCI) on Thursday, the minister said the court might pull up the centre for not fulfilling the commitment.
 
 
 
The Securities and Exchange Board of India (SEBI) had asked companies to appoint at least one woman director before April 1, 2015, adhering to rules set by the Companies Act 2013.
 
According to the Act, all listed companies and public firms having paid-up share capital of Rs 100 crore or more had to have at least one woman director each on their boards. SEBI, the stock market regulator, incorporated this law into its norms in February 2014 and had set October 1, 2014 as the deadline. All the listed companies had to appoint one within a year, and others reporting minimum revenue of Rs 300 crore had three years to comply. It was aimed to improve gender diversity in boardrooms of public and private companies. While the move was welcomed by CPSEs as a measure to bridge the gender gap, CPSEs were not in a hurry to meet the deadline. 
 
Though the Act did not clarify whether the women directors on the board have to be ‘functional directors’ – implying they are hands-on officers and part of the company – or can be ‘independent’ ones as well. Experts had apprehensions as they believed most organisations would try and take the easier way out by appointing ‘independent’ directors on their board. 
 
In May 2016, 22 PSUs were fined for not appointing women directors. A total of 1,375 BSE-listed companies and 191 NSE-listed companies were fined for failing to appoint women directors on their respective boards. Out of these, two were public sector banks and 22 were central public sector undertakings.
 
 
According to the data from Prime Database, which lists information on capital market offerings, there are 1,418 women directors holding 1,755 board positions in companies listed on the National Stock Exchange (NSE).
 

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