CS Monika Jain
Companies Act, 2013 along with Companies (Appointment and qualification of Directors) Rules, 2014 had made it mandatory for the following class of companies to have at least one women director in their Board:
a) All Listed Companies
b) Every Public Company having a Paid-Up Share Capital of Rs. 100 Crore or more.
c) Every Public Company having a Turnover of Rs. 300 Crore or more
Sub section 2 of section 149 gives the transition period of 1 year from the date of commencement to comply with the above said rule.
SEBI has further strengthened the idea by the amendment in corporate governance norms i.e. Clause 49 making it mandatory for listed companies to have at least one women director in their board by 1st October 2014 which is further extended to 1st April, 2015.
SEBI Circular No. CIR/CFD/POLICY CELL/2/2014 dated April 17, 2014 – This Circular Mandates Appointment of atleast one Women Director in Listed Companies.
SEBI Circular No. CIR/CFD/POLICY CELL/7/2014, Dated- September 15, 2014 – This Circular Extends last date to 31.03.2015 for Compulsory appointment of women director by Listed Companies.
Now just 10 days left to comply with this requirement of Companies Act and Listing Agreement. But as per the data of prime database, about one third of listed Indian companies do not have a woman director on their boards till date i.e. 451 of the 1,479 companies listed on the National Stock Exchange have not met the requirement yet. If all companies started complying this requirement today 45 women directors would have to be appointed everyday for the next 10 days which is obviously not going to be happen.
Finding efficient end capable women Director from a huge work force is really such a big task for Indian Companies????? Or it is the male dominating Indian Companies that are not digesting the concept of at least one women Director on the Board??
The other loop hole plucked by the companies is that they are appointing mothers, wives, sisters and daughters of the promoters. A prominent example is Nita Ambani, the wife of India’s richest man, Mukesh Ambani. She was appointed to the board of Reliance Industries in June 2014. There are many other such examples also. This seems that corporate are complying the law in its letters only not in its true spirit. Women from the promoter group will have the voice as that of promoters. By doing this the actual intention of the law defeated.
Recently, SEBI has threatened to penalize companies that do not meet the April 1 deadline. But the penalties are not yet known. Countdown begins, let’s see what happens.
Image courtesy of mrsiraphol at FreeDigitalPhotos.net