MUMBAI: This past year, Ireena Vittal has been appointed to the boards of five Indian companies. The former partner at McKinsey is a director at Axis Bank, GlaxoSmithKline Consumer Healthcare, Wipro Limited, Godrej Consumer Products and Titan. She could probably get even more board memberships if she is so inclined.
With the new Companies Act mandating women's representation on boards, companies are searching far and wide for good candidates.
Listed companies need to have at least one woman on their board, according to the law that was passed by the Lok Sabha in December. The deadline varies from one year to three years, depending on the size of the company.
But topflight women managers are having to turn down such offers because many just don't have the time. Naina Lal Kidwai of HSBC, Kalpana Morparia of JPMorgan, Renuka Ramnath of Multiples Alternate Asset Management and Falguni Nayar of Nykaa.com are all busy running their own companies.
Kidwai, director at HSBC Asia-Pacific and country head of HSBC India besides heading Ficci, has been fielding various job offers.
Search Firms Flooded with Mandates from Top Cos to Comply with Law
"Yes, the requests are very much there. We still don't have a large enough universe of women that can be drawn from for board positions," she said. Kalpana Morparia, CEO of JPMorgan India, is independent director of Philip Morris International, CMC Ltd, Dr Reddy's Laboratories and Bennett, Coleman and Co Ltd (BCCL), publisher of The Economic Times.
"On a generic basis, there is a greater demand among organisations to have women independent directors on board after the new Act," she said. Some companies such as Wipro, which hasn't had any women directors for the past three decades, or others like GlaxoSmithKline, which has never had one, have been prompt in complying with the law.
In the past five months, executive search firms have been flooded with mandates from top companies looking to comply with the law.
"There is a rush for well-qualified women board members. Organisations are looking for women directors who are experienced in board service, with the required domain or functional skill experience and with cultural compatibility with the company," said Anjali Bansal, MD of SpencerStuart, who recently joined the board of GlaxoSmith-Kline Pharma. Bansal is being wooed by other company boards.
The rush is likely to intensify as companies have a limited pool to search from, said Suresh Raina, senior partner at Hunt Partners, an executive search and board advisory firm. It doesn't help that top women bankers such as Chanda Kochhar and Shikha Sharma can't be tapped - Reserve Bank of India doesn't allow bank CEOs to be on boards of other companies except by rare special permission. Out of India's top 100 listed companies, 34 don't have any women directors, according to data from Indianboards. com, a joint initiative of Prime Database and National Stock Exchange.
"If one were to extend this to women independent directors, as many as 55 of them do not have one," said Pranav Haldea, managing director, Prime Database Group. Demand for proven, independent women board members far outstrips supply.
The empowerment initiative by the government is aimed at giving women a stronger say in running companies and giving them more authority in a country that has failed to ensure their rights or safety, reflecting the mindset of a society obsessed with male progeny.
And, while companies are keen on fulfilling the letter of the law, there doesn't seem to be much evidence they are making an effort to nurture talented women into positions of leadership.
"The response from the corporate sector right now is to try and get women who are already on boards or from family and friends. I am yet to see companies showing interest in taking women who do not have prior experience of serving on boards," said Arun Duggal, chairman of Shriram Capital and a veteran international banker.
He estimates that 60% of BSE-500 companies will need to appoint a woman director. Against this demand for about 300 women directors, the current available pool of high-quality, experienced women directors is not more than 100, he estimated. Duggal is currently engaged in an exercise aimed at bridging this gap.
Nayar, former MD and CEO of Kotak Mahindra Capital Co, has set herself a limit of serving on three to four boards as she's already actively leading a start-up. Nayar joined the Tata Motors board in May. "I am ready to be on multiple boards but I have an optimum number so that I can do justice to my role as an independent director," she said.
Some companies in which an independent director's term is coming to an end would rather fill the post with a woman board member. Raina of Hunt Partners said since high-profile candidates have their hands full, many of them are using the opportunity to churn their board 'portfolio'.
Renuka Ramnath, MD and CEO of Multiples Alternate Asset Management, is on the boards of several of her fund's portfolio companies. She points out that organisations have sought her out for her experience in private equity, shareholder value creation and ability to speak her mind, not because she's a woman. Ramnath is currently on the boards of Air India, Arvind Mills and Bharatiya Mahila Bank.
"I have always been getting a lot of requests to be a part of boards (as independent director) but I have been actively staying away due to time constraints. However, I joined the boards of Air India and Bharatiya Mahila Bank recently because they are government companies and I feel it is a privilege to be a part of these boards," said Ramnath, who previously headed ICICI Venture and ICICI Prudential Life Insurance.
Preparing Board-Ready Women
Given the dearth of women independent director prospects, companies are broadening the criteria to include younger executives, former bureaucrats, philanthropists and academics. For instance, former Planning Commission secretary Sudha Pillai joined the board of Jubilant Life Sciences in September. Pillai was one of the mentees of a programme undertaken by Shriram Capital's Arun Duggal to bring more women into the reckoning for corporate board seats.
He has roped in 24 leaders, including former Sebi chairman M Damodaran, HDFC's Deepak Parekh, former SBI chairman MS Verma and GM Rao of the GMR Group, to mentor competent women who can go on to become independent directors. Damodaran is a director on the board of BCCL, the publisher of The Economic Times. The programme will create 100 board-ready women by next year, with the first batch of 48 'graduating' by December.