MUMBAI: Confronted by a new law aimed at addressing the widespread absence of women from India’s boardrooms, the country’s richest businessman decided he knew just the woman for the job — his wife.
Nita Ambani, best known for her skyscraper family mansion, is voted in yesterday as a director of her husband Mukesh’s giant conglomerate Reliance Industries — one of several firms opting for female relatives over outsider talent. The law, passed last year and with varying deadlines for firms depending on turnover, aims to boost gender diversity at the top by insisting on at least one woman in the boardroom of listed companies.
“My firm has been head-hunting for over a decade and I have not had businesses actually looking to hire women from outside the ranks for board positions,” said Mahalakshmi, the head of the Mumbai-based Professionele Consulting, who uses only one name. “Businesses would want someone whom they can influence and ensure conformity in the board,” she added.
Women make up roughly 50 percent of India’s population of 1.2 billion, but in terms of female labour participation it ranks a dismal 120th among the 131 nations surveyed by International Labour Organisation in 2013.
Credit Suisse’s Global Gender Gap 2013 ranked India at 101 out of 136 countries and found that only nine percent of the firms surveyed had women as part-owners.
The “perception hurdle” of male-dominated Indian corporates rather than any lack of business sense among women is keeping true talent away, said Kiran Mazumdar Shaw, the founder and head of Biocon, a leading name in India’s biotech sector.
“There is an ecosystem geared towards negative selection that excludes women. The job criteria are fashioned out in such a way that only men will make it to the short list,” 61-year-old Shaw said. “So while a company advertises for talented risk-takers on one hand, the board is actually risk-averse and steeped in convention when it comes to allowing women to join their ranks.”
Shaw said she too struggled against the same “credibility issues” when she started Biocon 36 years ago but she kept pushing on until better days came.
In some cases women themselves are hesitant to step forward, say analysts, for fear of being a token female face in the boardroom — expected to rubber stamp decisions rather than bring any fresh perspective.
Padmaja Alaganandan, who advises on human resources at consultancy PricewaterhouseCoopers, said women were worried about being promoted for their gender rather than talent and “whether their voices will be even heard”.
Since the new law was passed, other well-known companies turning to female relatives for their boardroom positions include the fabric and fashion retailer Raymond Group, cigarettes-to-soap conglomerate Modi Group and Century Textiles and Industries.