Issuu on Google+

Introduction

the perspective of both decision making and

Out of 1182 board of directors of companies representing BSE-100 index (from CMIE database),

a

meager

36

representing 38 companies. women

board

members

are

women

Discounting belonging

to

promoter‟s family, the number comes down 23. Probably this 25 indicates the list of women executives who have risen the ranks to be part of boards of directors of India‟s progressive companies.

This does not

indicate that the rest 11 are not meritorious enough to be directors of the respective companies, but our topic focuses on professional executives who are not related to the promoters. Reduce this 25 by another 3 as these 3 women board members are of foreign origin. In percentage terms these 22 represent 1.86% of total board members4.

performance of the firm as managerial effectiveness, emotional maturity and people bonding

skills

are

seen

as

striking

differentiators between men and women", said Ms. Ellora Panda, Head Management Development Function, Idea Cellular East India when we approached her. Ram Ramaswamy, CEO of SwB, India was of the opinion that “Success is not a simple consequence of having high testosterone levels. Increased representation of women opens up new opportunities by bringing in new ways of thinking and/or visualising new opportunities”. However, not everyone was of the same opinion. “I don't really see women in business acting or deciding differently than men - the only thing women may bring is a greater need than men to get noticed or relevant given the struggles

Going by the sheer scantiness of

they've had in the past - not sure that this

women in corporate India boards, does it

makes for better decisions however”, said

indicate that very few India women have

Jack Tatar, Ex-Vice President at Merrill

capacity to add value to a company? Or is it

Lynch and Ex-Director at Avon Products

that effectiveness of women as a leader at

when we requested him to give his opinion.

the company‟s board level is yet not established.

To get a clearer picture, we decided to extract existing information. Research has

We

approached

some

senior

shown that on an average, Fortune 500

executives of the corporate world to get an

companies with more than three women on

answer to the questions raised above. "More

their company‟s board turned in better

participation of women would change

financial performances than those with

fewer women board directors1. McKinsey

Data Analysis:

study, Women matter, published in October 2007 also mentions the correlation between corporate performance and the presence of women in leadership roles. Then we were stuck with two questions-Do people think that more women on company board are likely to make company more profitable and more stable? And if it‟s true then what is that women do that makes them an effective decision maker. We got answer to the second question from research which established that women tend to focus more on a longterm perspective2. “Women are not more risk averse, but they are more risk aware.3” mentions Ruth Sealy from Cranfield School Discussion I:

of Management. To answer the first question raised above, we conducted a survey. We designed a questionnaire

-

http://tr.im/adweta

and

approached approx. 500 people out of which 108 people responded.

Is there is a strong correlation between promoting women into the executive suite and high profitability.

1. By Gender

50 45 40 35 30 25 20 15 10 5 0

Graduate Post Graduate

Discussion II:

Do increased participation of women in a firm’s decision making process and the mix of attributes that they bring to the table have a positive effect on the risk propensity and performance of the firm? 2. By Education

1. By Gender

Discussion III: Had Lehman Brothers been Lehman Sisters, things may have been better. The world economy would not have been in such a mess if more women had been in charge?

2. By Education

1. By Gender

2. By Education

1. By Gender

2. By Education

Discussion IV:

Companies having more women on board perform better during bearish times. Do you agree?

By Education Discussion V: Companies having more women on board perform better during bullish times. Do you agree?

1. By Gender

Summary: Through the survey, we concluded that in general both men and women agreed that is there a correlation between promoting women into the executive suite and high profitability of the company. However the percentage of women who agreed was more than men. Both the genders also believe that increased participation of women in a firm‟s decision making process and the mix of attributes that they bring to the table have a positive effect on the risk propensity and performance of the firm. However both men and women disagreed on the point that the world economy would not have been in such a mess if more women had been in charge. Men and women respondents had difference

and the mix of attributes that they bring to the table have a positive effect on the firm‟s performance and profitability. A balanced mix of women & men in the company‟s board is likely to bring stability, deep insight in

business,

experience

more women on board perform better during bullish times. Thus from the findings of the

thoughts

result

in

decisions. It will not only increase the pool of knowledge from which group decisions are made but will also facilitate innovation and

creativity,

providing

the

firm

a

competitive advantage and enhancing firm‟s capability to be flexible and deal with ambiguity.

1

for the hypothesis that companies having

and

constructive strategic discussion and better

having more women on board perform better

negated it. The same opinion was observed

and

business. Greater diversity of background,

References:

agreed with the hypothesis, men strongly

perspective

plethora of talent which is needed in modern

of opinion on the hypothesis that companies

during bearish times. While women strongly

different

„The Bottom Line: Corporate Performance and Women's Representation on Boards‟ (October 2007) 2

„Gender differences in financial risk aversion and career choices are affected by testosterone‟-By Paola Sapienzaa. 3

Get women on board, bailed-out banks urged, FT.com (Nov. 20, 2008). 4

survey, we got closer to the answers we were looking for.

Women in India Inc. Boards—Are the Numbers Fair by Prabina Rajib, Effective Executive, Vol.VII, No.09 (2005)

Conclusion:

Id. Professor Spar cites as examples Brooksley Born‟s 1997

We concluded that increased participation of

„Investor reaction to women directors‟ - By Eugene Kanga

women in a firm‟s decision making process


Gender Inequality in Indian Corporate Boards