Friday, 6 September 2013

Appointment of a woman director is now mandatory for listed companies

In the present world of globalization and increasing competition in the corporate world, the need for gender diversity in the boardrooms is also increasing. The new Companies Bill 2013 makes it mandatory for every company to have at least one woman director in their organization. Hence, listed companies have to compulsorily comply with this norm.

It further describes that woman director can be executive, non-executive or independent director. It also describes the appointment of promoter’s women relatives or professionals. In the corporate world, India has a very low percentage of women representation on boards. Thus, the Companies Bill 2013 provides a mandatory quota and compulsory provision for appointment of a woman director which will help to bring in diversified change in the corporate world as their focus is not only restricted to merely growth and profit of the company, but it aims to improve the overall performance of the company.

Due to the growing importance of diversity in the boardrooms, especially in improving corporate governance, woman play a major role and lay a lot of emphasis on attaining the company’s growth as their priorities are multidimensional.

In addition, the practical advantage of compulsorily appointing one woman director on the board is a positive change, stronger decision, more innovative and will help in better risk and decision – making management.

To conclude, this would be an increasing opportunity for women to make recognition in the corporate world. Also, women will be well represented, and so in the future we need to be thinking of other diversity issues.

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