Tuesday, 12 July 2016

Role of Women in Corporate World

Increasing Role of Women in Corporate World

From the date of commencement of the Second Proviso to  Section 149(1):
·     Every listed company shall appoint at least one woman director within one year
·     Every other public company having paid up share capital of Rupees  100 crores or more or turnover of Rupees 300 crore or more as on the last date of latest audited financial statements, shall also appoint at least one woman director within 1 year
·         Compliance to provisions of 149(1) within 6 months of   date of incorporation  for companies which have been incorporated under the Companies Act ,2013
·         In case of vacancy in the post of the woman director, such post must be filled up within 3 months or next board meeting whichever is earlier
[(Second Proviso to Section 149(1) of the Companies Act, 2013 read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014]

 Existing companies (under the previous companies act) have to comply with the above requirements within one year and new companies (incorporated under the new companies act) have   to comply within 6 months from date of incorporation. Any vacancy in the post of the woman director needs to be filled in a strict time based framework.
These reforms have also been substituted with punishment and penalty being handed out. Initiating
action for non- compliance, the Ministry of Corporate Affairs (“MCA”) has asked many unlisted companies to explain why they have not appointed women directors on their Boards as mandated under law. 
Notices have also been served to over 700 listed companies by the NSE and BSE about the absence of Women Directors’. The Registrar of Companies (“RoCs”) has started issuing show cause notices to unlisted firms in this regard.

In recent times, experts have suggested that having women on the Board of Directors (“Board”) makes it easier to comply with the above given regulatory requirements as prescribed in the Companies Act, 2013(Act, 2013)  , along with helping reduce  the gender imbalance and promoting diversity in the boardroom.
A greater  gender diversity at board level is a desirable outcome for companies and businesses as women   show a rational attitude to boards and promoters thereby assisting the smooth functioning of the business process and promoting the ease of business.  

Many big corporations such as  Axis Bank ,  Cipla  , Ultra-Tech Cement  and Bio-Con have women Directors’ and CEOs’(“Chief Executive Officer”). Even so, the gender gap at the top is glaring as only three out of 100 CEOs in India are women. The SEBI, in compliance with the Companies Act 2013,   had made it compulsory to have at least one woman on   the Board  way back in October 2014. Despite this, many companies including several public sector companies are struggling to meet the norm.
Experts argue that women in top managerial roles apart from adding the much needed gender diversity, also take a personal interest and  drive programs and they are deeply invested in the process .They add to the effectiveness of the boards and improve the quality of discussions and decisions .
It is submitted that more and more companies should hire women in Key Managerial Position (“KMP”) to bring in much needed diversity and reduce the ever increasing gender gap that has been plaguing our country.
According to a report, published by Thomson and Reuters, women have for a very long time experienced a lot of atrocities at workplace - second to men, unequal remuneration, lack of representation, physical abuse amongst other things.
Providing women with top jobs apart from empowering women will allow them more representation in the corporate world and their needs and requirements may get their due finally.
The latest amendment regarding women directors’ in Act, 2013 is a welcome change in the corporate world. Providing women with the top jobs like Director and CEO will afford women the much needed empowerment and representation to help solve issues that have been traditionally faced by women in the corporate world for many years’ since Independence apart from providing Gender diversity at work place.
For more information about Women Directors’ and other Company Law related provisions: http://www.nclt.in/

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