“Women Director” – Will Companies Act 2013 qualify for biggest accolade?

Why Companies Act, 2013 mandates presence of women director?

Argument in favour and against having a mandatory Women Director

Which Companies are required to appoint Women Director and within what period?

Please read .....

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“Women Director” – Will Companies Act 2013 qualify for biggest accolade?

Ms. Priyanka Venkatapathy M.L. (Awaiting CS membership)

“There is no chance for the welfare of the world unless the condition of women is improved.”

said Swami Vivekananda.

Though we have been talking about women empowerment for quite a long time, even today we cannot deny the fact that India is still a male dominated country. Government is trying its best to bring gender equality in all areas as envisaged in the Constitution. Inspite of it, there are some gaps between what is aspired and what is witnessed. Now with Companies Act, 2013, government is trying to take corporate world in action by combating this age old gender inequality. Companies Act, 2013 is appreciated by many for its initiative of mandating a women director in board for certain set  of Companies, while there are also criticisms on several impracticalities that corporate would face in implementing the same.

What does Companies Act, 2013 do in favour of women?

Now we will have a closer look into the provisions relating to women director.

Section 149 deals with provisions relating to appointment of Directors and matters such as the minimum and maximum number of Directors, type/class of Directors to be appointed.

Second Proviso to Section 149(1) stipulates that Companies with such criteria to be announced shall appoint at least one Woman Director.

Rule 11.1 in Chapter XI of the Draft Rules mandates the following companies for appointment of women directors on the boards of companies:

a. Every listed company shall appoint at least one woman director within one year from the commencement of the second proviso to Section 149(1)

b. Every other Public company:

·         having paid up capital of 100 crores or more or

·         a turnover of 300 crores or more

have to compulsorily appoint within three years from the commencement of second proviso to Section 149(1) of the Act.

Why Companies Act, 2013 mandates presence of women director?

As a professional, we know the importance of the Board of Directors in a company. But when we look at the percentage of women in the board of listed companies in India, We would know the reason why the Companies Act, 2013 has mandated women to be present in the board for certain criteria of companies. The percentage of women in the board of listed companies in India is just 7%.  Now we can be confident that this percentage would certainly increase with new Companies Act, 2013 being notified.

Other Side of the Coin:-

While the Companies Act, 2013 is celebrated for this initiative, there are also contrary views questioning the availability of necessary number of Women Directors & the quality of such women Director.

Conclusion:-

There are no doubts that this mandate would bring diversity to Board. But this mandate should not compromise on talent. There are many proven evidences that there are several women leading many companies and making them successful. We can be sure that Women would definitely go further in contribution to the Companies, in which they act as a Director if the right methods of choosing directors are followed by Companies and Companies Act, 2013 will be given the biggest accolade.