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Gender balanced boards to drive future growth


The SEBI regulation mandating at least one independent woman director in the top 1,000 listed companies by April 1, 2020, is a commendable step in the right direction.

Gender balanced boards to drive future growth
The SEBI regulation mandating at least one independent woman director in the top 1,000 listed companies by April 1, 2020, is a commendable step in the right direction. However, there is much more work required before we can truly tap into the value of diversity and bring about a deep-rooted and systemic change in boardroom dynamics. This means opening up boardrooms to new ideas, richer debates, and different perspectives. These important prerequisites deliver growth in a world where consumers, regulators, supply chains, stakeholders and their interactions are changing. How can companies even begin to grapple with this huge change when their boards are mired in the fixed ideas of yesterday that prevent them from listening to ideas just because they come from a woman? Although the letter of the law mandates at least one woman-director, companies need to embrace the spirit behind it and incorporate the unique strengths and perspectives of women. Interestingly, some of the bigger business houses and private companies that have adopted this in spirit have taken giant strides thereafter.
As the world grapples with the COVID-19 pandemic, women leaders stood out in their handling of the crisis. Harvard Business School historian Nancy Kohen, in her April 2020 article “Real Leaders are Forged in Crisis”, elucidates how women leaders of countries both big and small, have all swiftly and deftly tackled the COVID-19 issue, through a combination of inspired and transformational leadership in the time of crisis. They have led with calmness, clarity, decisiveness, proactiveness, and empathy. These remarkable women leaders continue to courageously navigate their countries through uncharted times, continuously adjusting, improvising and re-directing as new information emerges. Running an establishment, whether a country, a business, a household, requires both courage and leadership, and these leaders are a testament to the fact that women get the job done. Indian businesses need to recognise the strengths that women leaders bring to the table and leverage them to fully unlock their companies’ economic potential.
In India, many of the issues that women face have their roots in patriarchal oppression. These practices are evident throughout history – from the ancient practice of Sati to sex selective abortions. Presently, many women are shut out of family businesses. While some companies such as Apollo Hospitals Enterprise Ltd., Godrej Group, and Vinati Organics Ltd. have made significant strides towards gender parity on their boards, there are several others that have made little or no progress.
In the recent past, I fought against gender bias on the board of the Murugappa Group holding company, Ambadi Investments. As the representative of my family branch (the only branch without a male heir and board representation), I have sought a board position and have not been provided one, till date. I see no reason why my family branch should be excluded from a board representation when it was represented by my late father during his lifetime, with the same shareholding. If and when a collective whole suffers from gender as the cause of exclusion, the struggle transcends personal interest and underscores questionable ethics and principles. It tells us that there are systems and practices rooted in thepast that will not let the company look to the future. To that extent, a positive change will also inject the dynamism required into the board, and in the process ensure that the business conglomerate that was built over a legacy of 119 years is ready to face the challenges of tomorrow. Through my fight, I want to pave the way for other women to achieve greater participation, irrespective of whether a company is family-owned or not. I strongly believe that capability and credentials should be the cornerstones for board representation, not gender.
While it is difficult to change something that people have been used to for centuries, with firm resolve, robust planning and implementation by government and corporate leaders, it is possible. The first step, indeed, has been taken by SEBI. Now we must capitalise on it and build momentum to ensure that one women director’s voice is joined by many on every company’s board-large or small, public or private, listed or unlisted. Meaningful and systemic change can only happen when there is a critical mass of women at the very top driving changes. The road from the entry level to the C-suite needs major re-structuring to ensure a smooth ride for every woman, so that she may reach her chosen destination. The glass ceilings need to be shattered!
In today’s competitive business environment that is wrought with the challenges of globalisation, disruptive technologies, and pandemics, the ability to adapt to change and to thrive is becoming increasingly important. In the manufacturing sector, the transformation has been ubiquitous- from pen and paper design to computer-aided design, from routine manual operations to automated operations, and from traditional marketing to digital marketing. Change is happening, and it is happening rapidly- whether it be in manufacturing or management. Companies can no longer afford to turn a blind eye to change, diversity, inclusion, and equality. For their own good, they must adapt to change, and do it quickly. There is no valid reason why women should not have equal opportunity and representation at all levels of the organization. The composition of company boards should reflect the composition of the Indian population-50 percent women and 50 percent men.
Male-female balance on company boards should not be for the sake of balance but for what balance can accomplish. Numerous studies have shown that women bring unique skills to the table. A study by global consulting firm Hay Group found that women outperform men in 11 of 12 key emotional intelligence competencies such as collaboration, communication, ability to network, critical thinking, and professionalism, all of which overlap with essential leadership skills. McKinsey & Company’s 2019 Women in the Workplace Study found that women influence and control nearly 75 percent of household spending, particularly grocery and retail. Companies should take note of this important statistic, and ensure that this critical customer base is driving decisions from the board level through all levels of the product development chain. The Godrej Group has made significant headway in this aspect. From a bottom-line perspective, having women on board brings enormous value to an enterprise.
While the benefits of having women on boards are crystal clear, there is much action and momentum needed to achieve this in our prevalent corporate structures. We need to harness the voices of more than half a billion women, lobby for gender balance on corporate boards, and persuade our lawmakers to empower gender-balanced taskforces with a clear vision and mission, to drive these changes. India has the opportunity to be a leader among the developing nations and showcase what gender parity can do.
Author Valli Arunachalam is Karta – MVM HUF
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