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    India beats emerging markets peers in boardroom gender parity

    Synopsis

    A study by global index provider MSCI showed that women constituted 17% of Indian boards against 13% in China, 10% in Russia, 9% in Mexico and 14% in Brazil. But India trails South Africa (29%), Thailand (19%), the US (28%) and the UK (34%) in ensuring diversity at the highest decision-making body of a company.

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    In India, 6% of the companies studied had no women on their boards. It was lower than countries like China (29%), Brazil (28%) and Russia (25%).
    India beats its emerging market peers in ensuring gender parity in its board rooms, although its score trails those of the US and the UK, where nearly a third of the board members at top companies are women.

    A study by global index provider MSCI showed that women constituted 17% of Indian boards against 13% in China, 10% in Russia, 9% in Mexico and 14% in Brazil. But India trails South Africa (29%), Thailand (19%), the US (28%) and the UK (34%) in ensuring diversity at the highest decision-making body of a company.

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    The study was based on a set of 86 leading Indian companies included in the MSCI ACWI Index.

    Market regulator Sebi’s fiat that boards must have at least one woman member may have helped India score better than its peers.

    “There is definitely a change in Indian boardrooms; the number of women directors has increased compared to, say, 2014,” said Shriram Subramanian, founder and managing director of InGovern Research Services, a proxy advisory firm.

    “But it is largely because of the Kotak committee recommendations,” he said, referring to the corporate governance-related suggestions made in 2018 by a panel headed by Asia’s richest banker.

    Indeed, a closer inspection of the data reveals that 76% of the Indian companies in the study have just one or two women on their boards, the minimum to comply with Sebi's mandate. About a fifth of the companies surveyed have three or more women on board.

    This distribution is much more skewed toward the lower end of the spectrum when compared to countries like South Africa, the US and the UK, where 66-85% of companies have more than three women directors.

    “I have always been against mandating these things as it leads to situations like this where companies take this path of doing the minimum,” Subramanian said. “More sensitisation is needed. Business leaders need to show the path and the change needs to come from within.”

    The growth in participation of women in boardrooms also slowed in 2020 when compared to 2019, data show, especially in India and other emerging markets.

    “Emerging research has suggested that women are being more impacted by the economic fallout caused by the COVID-19 pandemic, which has the potential to undo years of progress,” according to the MSCI report titled ‘Women on Boards’.

    Another metric where India lagged peers pertained to the number of women CEOs. Just 3% of Indian companies in the study had a woman CEO as against 6% in China, 5% in South Africa and 14% in Thailand. The number is 14% for Singapore, 6% for the US and 9% for the UK.

    In India, 6% of the companies studied had no women on their boards. It was lower than countries like China (29%), Brazil (28%) and Russia (25%).

    A recent report by Institutional Investor Advisory Services (IIAS), another proxy advisory firm, found that 45% of state-run firms did not have an independent woman director even after Sebi made it mandatory in April 2019. The report studied a dataset of 45 public-sector companies.


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