NEW DELHI (Thomson Reuters Foundation) - Only four percent of the directors of publicly listed Indian companies are women, but a landmark law passed last year means companies must act quickly to put more women on their boards, a report said.
The report “Women on Boards”, by Biz Divas, a national network of professional women, and law firm Khaitan and Co, said that men hold 8,640 boardroom positions and women 350 in the country's 1,470 listed firms.
"There are many reasons for the scarce representation of women in senior leadership positions," the report, released late on Wednesday, said.
"Archaic cultural stereotypes on the roles of men and women in society are largely to blame, while widespread illiteracy and socio-economic problems further worsen the problem."
The Companies Act, 2013 , passed by parliament in August last year, makes it mandatory for public and private firms with an annual turnover of at least three billion rupees ($50 million) to have at least one female director by Oct. 1, 2014.
Experts say the law recognises that having women in a company’s boardroom correlates with better performance and sustainability.
India has two companies in the Fortune 500, Reliance Industries and Indian Oil, but only one of their total of 30 directors is a woman, the report noted.
The scarcity of women in the boardroom is not unique to India - nearly one-fifth of the world's 200 largest companies have no women directors, the report said.
Some western countries such as France, Italy and Norway have made it compulsory for larger firms to have women on their boards. As a result, in Norway women's representation on company boards surged to 41 percent in 2013 from 7 percent in 2003.
But the largest economies – the United States, China and Japan - have no quotas for women and have had the lowest increase in female directors, suggesting that companies do not bring in more women directors unless they are forced to.
India is the first developing nation to make women directors mandatory, the report said, noting that Indian companies of the relevant size needed to find 966 women directors by Oct. 1.
"An equal opportunity workforce is critical in this day and age, whether it is in a science laboratory or the corporate boardroom," the report said.
"India may well be a good success story for the other developing countries, if the country is able to demonstrate an actual change in women’s representation on boards…"