Gender Inequality in Indian Corporate Boards
Gender Inequality in Indian Corporate Boards - Survey, Results and Quotes from Corporates.
Introduction Out of 1182 board of directors of companies representing BSE-100 index (from CMIE database), a meager 36 are women the perspective of both decision making and performance of the firm as managerial effectiveness, emotional maturity and people bonding skills are seen as striking representing 38 companies. women board members Discounting belonging to 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 promoters 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 Indias 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. Going by the sheer scantiness of women in corporate India boards, does it indicate that very few India women have capacity to add value to a company? Or is it that effectiveness of women as a leader at the companys board level is yet not established. We approached some senior they've had in the past - not sure that this makes for better decisions however", said Jack Tatar, Ex-Vice President at Merrill Lynch and Ex-Director at Avon Products when we requested him to give his opinion. To get a clearer picture, we decided to extract existing information. Research has shown that on an average, Fortune 500 companies with more than three women on their companys board turned in better financial performances than those with executives of the corporate world to get an answer to the questions raised above. "More participation of women would change fewer women board directors1. McKinsey 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 its 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 of Management. To answer the first question raised above, we conducted a survey. We designed a questionnaire http://tr.im/adweta and Data Analysis: Discussion I: Is there is a strong correlation between promoting women into the executive suite and high profitability. approached approx. 500 people out of which 108 people responded. 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 firms 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 of opinion on the hypothesis that companies having more women on board perform better during bearish times. While women strongly agreed with the hypothesis, men strongly negated it. The same opinion was observed for the hypothesis that companies having more women on board perform better during bullish times. Thus from the findings of the survey, we got closer to the answers we were looking for. Conclusion: We concluded that increased participation of women in a firms decision making process and the mix of attributes that they bring to the table have a positive effect on the firms performance and profitability. A balanced mix of women & men in the companys board is likely to bring stability, deep insight in business, different perspective and plethora of talent which is needed in modern business. Greater diversity of background, experience and thoughts result in constructive strategic discussion and better 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 firms capability to be flexible and deal with ambiguity. References: 1 ,,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 Women in India Inc. Boards--Are the Numbers Fair by Prabina Rajib, Effective Executive, Vol.VII, No.09 (2005) Id. Professor Spar cites as examples Brooksley Borns 1997 ,,Investor reaction to women directors - By Eugene Kanga