With barely a fortnight left for the October 1 deadline to have at least one woman director, only three listed central public sector enterprises (CPSEs) have appinted one.

Under the Companies Act, 2013, all listed companies and public firms having paid-up share capital of '100 crore or more should have at least one woman director each on their boards. Securities and Exchange Board of India (Sebi), the stock market regulator, incorporated this law into its norms in February 2014 and set October 1 as the deadline. While the move was welcomed by CPSEs as a measure to bridge the gender gap, the story is otherwise on ground. CPSEs, it seems, are not in a hurry to meet
the deadline.

The search is on
In more than five months since Sebi announced the deadline, only three CPSEs -- maharatna Bharat Heavy Electricals Ltd (BHEL), and navratnas National Aluminium Co. Ltd and National Buildings Construction Corp. Ltd. – have appointed women directors. Twenty-three of the 47 listed CPSEs are operating without a woman representative on their boards, according to Prime Database, which compiles data on capital markets and related issues. Of the 40 CPSEs listed on the National Stock Exchange (NSE), 19 still do not have  a woman director, along with four of the seven listed on the Bombay Stock Exchange (BSE).

The listed navratna companies that do not have a single woman director on their board include Bharat Electronics Ltd, Bharat Petroleum Corporation Ltd, Neyveli Lignite Corporation Ltd, NMDC, Power Finance Corporation, and Rural Electrification Corporation Ltd.

The picture is hardly any brighter among the maharatna companies. The rare woman representative there is either a nominee of the ministry concerned or a retired bureaucrat. Only BHEL has appointed an independent woman director. ONGC, which has never had a woman on its board, is still to comply with the Sebi directive.

Woman director on CPSE board

Sebi’s new rule mandates all listed companies, including CPSEs, to have at least one woman director on their boards by October 1

There are 47 listed CPSEs in India, 40 on NSE and 7 on BSE

Of the 40 CPSEs listed on NSE 22 did not have a woman director, of which only three appointed women directors after the Sebi directive

ONGC is the only maharatna company that has never had a woman director

Of the 7 BSE-listed CPSEs, 4 still do not have a woman director

Ask a CMD and he is most likely to cite “lack of women in PSE talent pool” to justify their absence from the company board. A senior official at Public Enterprises Selection Board (PESB) that selects chairmen, managing directors, chairmen-cum-managing directors and functional directors for CPSEs, disagrees. It would be wrong to presume dearth of talent as the reason for the less number of women on CPSE boards, he said. “We have made a lot of recommendations on appointments of women candidates in the past. There are enough good candidates.”

But for the appointments to be made, CPSEs have to approach PESB with their request for women directors. “There hasn’t been any enquiry from CPSEs to appoint women directors in the last few months,” said the official. Apart from seniority, no other reservation-based appointments have been done, nor have they been sought for, he added.

UD Choubey, director general of SCOPE, the apex body of CPSEs, says that over the years capacity building has not been to the extent that one can put at least one woman director in all the CPSEs today, even if one wants to.

“Overall women constitute around 12 percent of the total work force in CPSEs. Incidentally, most of them are at the lower level. In top positions there is hardly any representation. The candidate must be in the rank of at least GM or ED to be promoted to the board level.”
Choubey says not many women candidate, with requisite qualification and experience, are coming before the PESB.

The companies should have a succession planning and they must prepare women candidates who can take the position of functional directors in the board. “We are conducting a programme called global world leadership training. I wrote separate letters to CEOs asking them to nominate women for the programme. But unfortunately, after great effort we got just one response. So there should be enthusiasm from PSEs as well to nominate women for such training programme.”

There is also lack of data on the number of women in PSUs. When the women in public sector (WIPS) forum was set up in the early 1990s, members had to put a lot of pressure on the authorities to include data on women’s representation in the annual survey of the department of public enterprises. It was introduced after much resistance, but was discontinued two years ago.

With the Act in place, companies – public and private – are spreading their net far and wide to tap good talent. Some believe that the rush will intensify as companies have a limited pool to search from, while others say it is all about changing the mindset of the corporate world.
Recently finance minister Arun Jaitley also made it clear that CPSEs should comply with the Sebi norms. “If it (PSU) is a listed company, then whatever are the guidelines issued from time to time by the listing authority, which is Sebi, they will have to follow,” he told the Rajya Sabha.

Despite many requests from firms to relax the norms or extend the deadline, officials at Sebi say it is unlikely that the deadline will be extended.

The mandatory provision in the Companies Act and the Sebi directive on employing women directors, however, calls for strong action against defaulters.

This story first appeared in Magazine Vol 05 Issue 16 (16-30 Sept 2014)