About 17.1% of Indian company boards are occupied by women members, just 2.6% short of global average of 19.7%. In fact, the percentage of women occupying board positions has increased by 3.3% since 2018, states Deloitte’s global Women In The Boardroom report, unveiled today.
In the backdrop of India Inc’s aggressive drive on diversity and inclusion initiatives, this seems like a good sign. However, the progress on getting more women to occupy board and leadership seats still leaves much to be desired, especially since the Companies Act mandated having one woman member on every board in 2013. Since 2014, there has been a 9.4% increase in women entering the boardroom, the report states.
If it’s any consolation, India fares better than its immediate neighbor China, where women’s representation in boardrooms stands at 13.1%. France (43.2%), Norway (42.4%) and Italy (36.6%) top the list of countries with higher share of women members of company board.
Another glaring area of gap was the average tenure held by men and women board members and chair. Women board members hold tenure of 5.1 years, as compared to 8.1 years by men. Similarly, while men held on to chair position for 10.7 years, the women’s tenure was less than half of that at 4.9 years. At the global level, the tenure of women members has decreased from 5.5% to 5.1% in the last three years.
Meanwhile, the average age of women board members was 57.4 years, with board chairs being 59.2 years. In comparison, average age of male board members and chairs was 61.1 years and 63.9 years respectively, the report highlights.
“While the Indian regulators have set up a holistic framework to encourage the representation of women in key positions at corporates, the numbers suggest a significant gap between the ideated measures and ground realities,” says Atul Dhawan, Chairperson, Deloitte India.
Interestingly, while there has been an increase in women board members, there has been a decline in women holding the position of board chair. From 4.5% in 2018, the number has slid to 3.6% this year, the report highlights. In the same period, the number of women CEOs and CFOs have risen to 4.7% (from 3.4%) and 3.9% (from 2.5%), respectively. For the India findings, around 340 companies were studied having 413 women board members.
What’s also notable is that the stretch factor (women holding more than one board position) has slightly risen to 1.30. “The strectch factor is increasing, which means that the requirement is increasing faster than the supply of women board members,” says Sachin Paranjape, partner, Deloitte India. Men, by comparison, have a stretch factor of 1.20.
Life sciences and healthcare sector showed considerable progress in welcoming more women members to the board, where women’s representation stands at 21.5% compared to 15.8% in 2018. This is followed by technology, media and telecommunications (18.4%), consumer business (18%) and manufacturing (16.6%). Financial services sector has seen only 15.5% women on the board, in contrast to the higher number of women leaders in the sector. “This was a surprise as we would have expected financial sector to have higher proportion of women directors but that is somehow not reflected in this report,” Paranjape said.
Nominating and Compensation committees saw more women board members’ involvement followed by audit, governance and risk (in that order). Similar trend was seen in committees that had more women holding the chair position.