No woman on board: 2,690 firms to get notice

The Securities and Exchange Board of India had announced in April a minimum Rs 50,000 fine for flouting the law

As many as 2,690 companies are yet to appoint a woman director on their boards, even as the last date to do so was over eight months ago.

The Centre has started the process of serving show-cause notices on such companies.

According to the data, 10,328 companies, registered under the Companies Act, 2013, should have appointed at least one woman director by April 1, 2015.

Only 74 per cent (7,638) of them have complied with the law so far.

“Show-cause notices are being sent to the companies,” said the government in a reply obtained under the Right to Information Act.

However, the law does not prescribe any specific penalty at this stage, said Harish H V, partner -- India Leadership team, Grant Thornton India LLP.

According to the Act, every public company, having paidup share capital of Rs 100 crore (Rs 1 billion) or more or having a turnover of Rs 300 crore (Rs 3 billion) or more, should have appointed at least one woman in their board by April 1.

“The usual reasons (behind not appointing women directors) are that there are no appropriate women who could be taken on board. One should also look carefully at the numbers. 

"It is clear that 75 per cent have implemented the law.  One should examine how many of these companies that did not implement are operating fully and adhering to the other provisions, preparation of accounts, filing of returns, etc,” Harish added.

The Securities and Exchange Board of India had announced in April a minimum Rs 50,000 fine for flouting the law.

It also warned of further action, including against promoters and directors, if the companies remain non-compliant beyond six months.

Consequently, the Bombay Stock Exchange fined 370 listed companies in October following the Sebi notification.

“It is quite possible that many of the companies which did not adhere to the law are also defaulters on other counts due to operating issues, losses or other factors.

There will of course be some wilful defaulters among them,” said Harish.

WHERE DID THE WOMEN GO. . .

• 10,328 firms were to appoint at least 1 woman director
• 74%  (7,638) of them have implemented the provision of the Companies Act
• Rs 50,000, fine was announced by Sebi, in April for companies who fail to do so
• 370 listed companies were fined by the BSE in Oct as per the Sebi notification

The image is used for representational purpose only. Photograph: Reuters