At 17.3%, India Inc badly lags women board members

Corporate India lags the rest of its Western and Asian peers by a wide margin when it comes to the presence of women on their boards, with just 17.3 per cent of the large companies having them on their key decision making bodies, an international report said on Tuesday.

However, this is a near 6 percentage points improvement between 2015 -- when it was only 11.4 per cent -- and 2021, Swiss brokerage Credit Suisse said in the report, which covered over 33,000 executives from more than 3,000 companies across 46 countries, including over 1,440 firms across 12 Asia-Pacific markets.

Female representation on boards of large Indian companies has increased by 5.9 percentage points from 11.4 per cent in 2015 to 17.3 per cent in 2021.

However, it is still significantly below the global average of 24 per cent, said the report by Credit Suisse Research Institute.

The country also saw a marginal 2 percentage point improvement in management diversity over the past two years, rising from 8 per cent in 2019 to 10 per cent in 2021, based on the unmatched data-set, which did not specify how many Indian companies and executives were contacted for the survey.

At 17.3 per cent, India holds the third-lowest spot in the Apac region in terms of female representation at a senior management level, slightly ahead of South Korea at 8 per cent and Japan at 7 per cent.

Similarly, the percentage of female CEOs are 5, while CFOs are even lesser at 4 per cent.

According to the report, the Sebi mandate of having an independent female board member instead of simply having a female family member will go a long way in pioneering a change.

Globally, between 2015 and 2021, the percentage of women on boards increased by 8.9 percentage points and more than doubled if judged back to the start of the decade.

Europe and North America led the global average with 34.4 per cent and 28.6 per cent, followed by the Asia Pacific which came in at third with 17.3 per cent and Latin America at a lower 12.7 per cent, said the report, which also notes that companies with more women on their boards have invariably been giving more returns to shareholders and also are more profitable.

As per the report, the percentage of women in senior management positions or C-suite roles has also improved to 20 per cent.

The rising gender representation at the boardroom levels also illustrates the positive correlation between increased gender diversity in leadership positions and superior returns on capital, environmental, social and governance (ESG) and even the performance of the stocks.

On the entrepreneurship front also, women are making a better presence as the ratio of female-to-male-founded startups is up from 0.62 to 0.73 per cent over the past five years, the report noted.

Globally, European countries lead in percentage of female directors on the board, with France being the leader at 45 per cent, followed by England (at 10th slot) with 35 per cent -- meeting the prior target of the 30 per cent club” set originally for the FTSE 100 and FTSE 350 companies.

Even within the Apac, female board representation ranges from 34 per cent in Australia/New Zealand, where disclosure requirements and an ESG focus are perhaps more akin to those in Europe and North America -- to a lowly 9 per cent in South Korea.

However, in major Asian economies like China, Japan, India, and Korea (where except India, women employment is too high), has been slow by comparison, with a mere 3-5 percentage points improvement between 2015 and 2021.

The average percentage of women in senior management (defined as the number of female executives as a proportion of all executives) has improved from 17.6 per cent in 2019 to 19.9 per cent in 2021.

Europe and North America have the largest share of women in management roles but the divide between these regions and the rest of the world is far less than at the board level with the gap at the management level is just 1 percentage point.

Though the number of female CEOs globally has increased by 27 percentage points, they still only account for 5.5 per cent of the total, while the number of women CFOs have increased by 17 percentage points and now account for 16 per cent of all CFOs.

At 6.7 per cent, Europe has the highest percentage of women as CEOs, followed by Asia (ex-Japan) at 6.2 per cent, and the US at 5.6 per cent.

When it comes to women CEOs, Sweden leads the chart with 21 per cent, closely followed by Vietnam at 19 per cent at the second slot, with 16.3 per cent Singapore comes third and Thailand with 16.1 per cent is at the fourth slot.

At the CFO level, women are particularly well represented in Apac (ex-Japan).

Five out of the top 10 markets with the highest percentage of women in management are from Asia-Pacific -- Vietnam (34 per cent), the Philippines (31 per cent), Thailand (29 per cent) taking the first three slots, while Australia/New Zealand and Singapore trailing closely at 27 per cent.

In contrast, India (10 per cent), South Korea (8 per cent) and Japan (7 per cent) continue to occupy the bottom three positions.