Boards of central PSUs or all-boys clubs?

All central PSEs need to have at least one woman on their board by October 1. Only a few have them

jasleen

Jasleen Kaur | September 22, 2014




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)

Comments

 

Other News

In Maharashtra, a wave of aid for the needy

In Maharashtra, the epicentre of India’s devastating second wave, several NGOs and civil society organisations have been at work to combat the pandemic – by spreading awareness about precautions, by helping the slum-dwellers book appointment for vaccine, by providing meals to the marginalised a

Daily recovery averages 3.28 lakh cases in 10 days

The cumulative number of Covid-19 vaccine doses administered in the country has crossed the landmark of 17 crore on Monday as the Phase 3 of the nationwide vaccination drive expands further. India is the fastest country to administer 17 crore Covid vaccine doses – China took 119 days and USA 115 days

“UP situation extremely bad, govt hiding data”

India is battling the second wave of Covid-19 and infections are spreading into the interiors of the country, says Dr Anurag Bhadouria, National Spokesperson, Samajwadi Party. It is precipitated by the elections in five states, the Kumbh Mela in Haridwar and also panchayat elections in many states, he says

CoWIN to have new security feature from Saturday

The CoWIN system, the overarching digital platform for citizens seeking appointment for the Covid-19 vaccine, is introducing a new four-digit security code” in the application from Saturday to minimise a peculiar error and subsequent inconvenience to citizens. “It has been notic

Learn from Mumbai model to manage oxygen supply: supreme court

Mumbai, once the epicentre of the pandemic in India, has emerged as a model for all others in mitigating the crisis. The supreme court on Wednesday said the central government should adopt and take lessons from the Mumbai model to manage liquid medical oxygen supply for Covid-19 patients in Delhi.

‘What do they know of history who only history know?’

A Functioning Anarchy? Essays For Ramachandra Guha Edited by Srinath Raghavan and Nandini Sundar Penguin Random House India / 392 pages / Rs 650 In a long and versatile career spanning thirty-five years, Ramachandra Guha has prod

Visionary Talk with Dr. Ashok Seth, Padma Bhushan Awardee & Chairman, Fortis Escorts Heart Institute On Tackling Corona



Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter