Woman directorship – preceptive or expedient

With the introduction of new Companies Act, 2013, there’s mandatory inclusion of at least one woman director in the Board of every prescribed class of companies

Dharmesh Vankar

“Woman” (Whole of ‘Man’) whenever one heard this inevitable word, the image of mother, sister, friend, girl friend & wife will display in his mind. In the family scenario, especially in case of India, woman is angel of the family. One can’t imagine the life without woman. From the birth till the end of life, person needs a companion in the different form, say, mother, wife, friend, etc.

Gender equality

Provisions made under the Constitution of India such as: Right to equality under Article 14 of the Indian Constitution guarantees to all Indian women equality before law; Equal pay for equal work under Article 39(d), guards the economic rights of women by assuring equal pay for equal work; and Maternity Relief under Article 42, allows provisions to be made by the state for securing just and humane condition of work and maternity relief for women. From many years, the Government is providing special tax exemption to the women, but due to Indians’ thinking, the Indian society has remained male dominated. Are women now feel empowered in the sense that they are being equally treated by men in all spheres of life and are able to express one’s true feminine urges and energies? These are the important questions to be investigated with regard to women’s empowerment in India. The work place is one of the place where gender inequalities are easily noticed. (Every male boss has / wants a female secretary). But in the modern era the status of women is changing. The Government of India has formulated much legislation for women empowerment.

Companies Act, 2013 promoting women empowerment

With the introduction of new Companies Act, 2013, there’s mandatory inclusion of at least one woman director in the Board of every prescribed class of companies in India. It’s a much needed step initiated by Government for women empowerment, in the context of corporate world and ultimately, to recognize the role of women in promoting economic welfare of the Company.

As per second proviso to the Section 149(1) of the Companies Act, 2013, such class or classes of companies as may be prescribed, shall have at least one woman director. While as per SEBI (LODR) Regulations, 2015, appointment of woman director will apply to only such companies to whom corporate governance regulations are applicable.

Section 149(1) clarifies that all the companies must have the Board of Directors, which shall consist of individuals –

In case of Private Limited Company :- Minimum 2 directors

In case of Public Limited Company :- Minimum 3 directors

In case of One Person Company (OPC) :- Minimum 1 directors

Rule 3 of the Companies (Appointment and Qualification of Director) Rules, 2014 provides class of Companies which shall appoint at least one woman director, these are-

(i) Every Listed Company

(ii) Every other Public Company having

(a) Paid-up share capital of Rs. 100 crore or more; or

(b) Turnover of Rs.300 crore or more.

Any intermittent vacancy of a woman director shall be filled-up by the Board at the earliest but not later than immediate next Board meeting or three months from the date of such vacancy, whichever is later.

It is hereby clarified that the paid up share capital or turnover, as the case may be, as on the last date of latest audited financial statements shall be taken into account.

Any company which is incorporated under the new Companies Act shall comply with the above conditions within six months from the date of incorporation.

Number of directorships

As per the provisions of Section 165 of the Companies Act, 2013, a person shall hold office as a director, including any alternate directorship, in not more than twenty (2)) companies at the same time subject to maximum directorships in ten (10) public companies. However, SEBI restricts directorship as an independent Director to maximum seven (7) listed companies only. In case an independent is a Whole-time Director in any listed company, he / she can hold directorship as an independent director in maximum three (3) listed companies only.

Simplifying above citations in the context of any woman to be appointed as a woman director:

1. She can be appointed in a total of twenty (20) companies as Director including alternate directorship.

2. Out of the total of twenty, she can hold the position of Director in a maximum of ten (10) public companies.

3. Out of this ten (10) she can be in a maximum number of seven (7) listed companies and three (3) unlisted public companies.

4. If she is already a whole time director in one of the companies her maximum independent directorship in listed companies is three 3.

It may be noted that for considering the limit of public companies in which a person can be appointed as director, directorship in private companies that are either holding or subsidiary company of a public company shall be included.

Default in appointing women director

Stock Exchanges are advised to impose the following fine on listed entities for non-compliance with the requirement of clause 49(II)(A)(1) of listing agreement:

Compliance statues Fine structure
Listed entities complying between April 1, 2015 and June 30, 2015 Rs. 50,000/-
Listed entities complying between July 1, 2015 and September 30, 2015 Rs. 50,000 + Rs.1,000/- per day w.e.f. July 1, 2015 till the date of compliance
Listed entities complying on or after October 1, 2015 Rs. 1,42,000 + Rs.5,000/- per day from october 1, 2015 till the date of compliance

For any non-compliance beyond September 30, 2015, SEBI may take any other action, against the non-compliant entities, their promoters and/or directors or issue such directions in accordance with law, as considered appropriate. [CIR/CFD/CMD/1/2015 dated 08th April, 2015]

Keeping in view the above penalty, the Company should appoint woman director on its Board. Yet according to an estimate, nearly one-third of top 500 listed companies do not have any female representation on their boards.

Why to appoint woman director on the Board?

Before answering this question, I would like to draw your attention towards the qualities / traits of woman, which are as follows:

– Negotiator (at the time of buying “sabji” or household things);

– Adaptable (female leave her house and his family for making new family);

– Organiser (manage whole house);

– Good learner (while teaching her children, she learns too);

– Arbitrator (preventing her children from father);

– Networker (she can easily mix up with others) ;

– Good listeners;

– Proactive and many more.

By considering the above qualities, if the Companies appoints woman on their Board, then definitely they will be benefited in many ways like by way of negotiation power of woman, company can crack a decent deal at the reasonable consideration or say, by good networking skill, company can make new clients which will ultimately helpful to boost up the economic conditions of the Company, for example, Chanda Kochar, Managing Director of the top of the private bank of India (ICICI Bank Ltd). Women are thought to be more inclined towards social work. As now the Corporate Social Responsibility provisions become mandatory, woman directors can effectively contribute towards CSR activities of companies by minutely following the flow of activities, acting upon concerns and so on. WDs with different backgrounds offer unique perspectives that may help counter the conventional wisdom and increase consideration of a wider range of potential solutions.

Ground reality

With the compulsion of woman director on the Board, many companies have welcomed this step open heartedly by bringing women director on the Board. Some of the companies have selected woman director from the field of academics, law, art by keeping in mind the different perspective like effective CSR implication and brand building. Even, preferences also given to members of professional bodies like ICAI, ICSI & ICMAI for candidature as a woman director on the Board. Inspite of such advantages, some Corporates appoint woman director out of compulsion merely for compliance purpose from the group of promoters of the Company but it’s not valid at all. Corporate should have to gulp up the spirit behind the law for enacting woman director’s appointment in Company. There is one saying – Change your attitude, change your destiny. Keeping in mind this saying, if corporate change their mind and see the things in positive way, it will be win-win situation for them by appointing woman director on the Board.

Many corporates raising the doubt on availability of enough capable women for the position. Some corporate also argue that they have not been appointing WDs because they’re not able to find right candidate for the same. But they forget that in present scenerio girls are doing better than boys in most of the fields. The annual results of Secondary and Higher Secondary Board examinations reveal this fact- More women are getting degrees than men, and are likely to fill new jobs in every field. Hence if you desire something so much, so truly then the universe will definitely conspire (जहाँ चाह, वहाँ राह) to find the right woman candidate for the Boards.


Rigid, conservative and typical mentality of Board members ignore the concept of woman director by stating that ‘she’s only lady’. But we should accept the provision of women directors in spirit and not just in letter by keeping in mind the benefits of gender diversification. Considering the present scenario, we see woman director is truly a gem for the company if the legislation is implied in correct spirit as thought by law maker, so why should we restrict it to only few big shot companies. We must try to incorporate many other mid size companies too by reducing the threshold limit as specified in the legislature.


– Companies Act, 2013

Companies (Appointment and Qualification of Directors) Rules, 2014

– SEBI (LODR) Regulations, 2015

– Business Standard – March 17, 2015

Categories: Company Law

View Comments (1)

  • 25 reasons “Why IPC 498A is AntiSocial?”
    1.It is handled under the Criminal law for marriage related matters and
    not under Civil Laws. 2.Nonbailable
    warrant does not require proof before arrest. No investigation necessary. This
    exposes the vulnerability of the accused taking away their basic human rights. 3.Even those who were not part of
    the ‘daytoday’
    family life could be named and arrested on one complaint, which can also include pregnant women
    and children.4.Accused is presumed guilty until proven innocent. Violates the basic principles of natural justice as laid
    down by Amnesty International.5.Gifts are sometimes misunderstood as dowry. Who decides that the gift exchanged
    were ‘gifts or dowry’?6.It is noncompoundable
    which means that the complaint can’t be taken back once registered.
    This hinders any scope of reconciliation between the couple.7.After a man is accused of 498A, he will be not be in a
    position to take her back as the accused and petitioner cannot influence each other in a criminal case. Moreover it
    will lead to severe breach of trust and chances of reconciliation becomes extremely weak.8.Old parents who lived
    with dignity and respect have to live with the stigma of the allegation of harassing their daughterinlaw
    for the rest
    of their lives.9. Groom’s relatives don’t find a suitable bride after they are accused under 498A10.Most of the cases
    are filed because the husband refuses to throw his parents out of the house at the wife’s demands.11.Husband’s job
    is at risk when he is accused under 498A who could even be the only breadwinner of the family.12.The health of the
    old parents dangerously deteriorates after they are arrested in a 498A case.13.Some even commit suicide for not
    able to withstand the depression and frustration of been falsely accused.14.Faith in marriage dwindles to such an
    extent for the accused family that they refrain from tying the knot again.15.In most of the cases the family ends up
    paying a very high price to settle the case, the money that was saved for the parent’s health.16.Most often the
    lawyers tend to take the family for a ride to extract as much money as possible. 17. The possibility of a woman
    on a trivial matter in the family is never considered as a reason of complaint. 18.A woman tries to get
    divorce proceedings faster by filing a 498a case even if no dowry was demanded. 19.The witnesses (neighbors) tend
    to support the woman for not getting into a police case. They even fear of been accused by the woman if they don’t
    support the woman. 20.Some women marries an NRI and slaps a 498A case only to extort large sum of money
    21.Even after knowing that the complaint can be false, police tend to support the woman and asks the man to settle
    the case with a financial compensation. 22.The case can easily linger in the court for years and only the groom’s
    family has to pay the price.23.498A case can be filed even after the divorce, which only means that the accuser
    wants to demand money legally apart from maintenance. 24.There is no prohibition clause in the 498A law that
    would stop women to misuse it. 25.It is nearly impossible to file a case of defamation on the accuser because the
    police will not register the case and it would be hard to prove it. Dowry deaths still flourishing in the rural areas and
    misuse of 498a law is flourishing in the urban areas. Unwillingness of the women’s organization to alter the law so
    that misuse of law can be stopped is evident. On the contrary, women organizations are planning to strengthen and
    increase the severity of the 498a law to curb dowry death, which is absolutely preposterous. If the misuse of laws
    still continues then the social infrastructure will collapse which will have a direct unfavorable impact on the country’s
    economy. If the law can’t curb dowry deaths, can’t even stop misuse, then what is the use of such a law that causes
    millions of people to suffer?



Privacy Settings