The Companies Act, 2013 is milestone legislation in India that revamped the laws governing a
corporation from its birth to dissolution. The legislation attempted to try to do away with all the
provisions that were outdated and inconsistent with growing business trends.
Keeping in mind the limited representation of women in business in India, Section 149(1) of the
Act provides for the compulsory appointment of one woman director in certain classes of
companies. Section 149(1) is perhaps the first step towards achieving egalitarianism in the Indian
THE WOMEN DIRECTORS CONUNDRUM
Mandatory “quotas” within the Board of Directors for women has been a much-debated issue
since the overhaul of the Companies Act in 2013. Section 149 of the Companies Act, 2013 and
SEBI (LODR), 2015 made it mandatory for all listed companies to have at least one woman on
their boards making it landmark legislation of the Companies Act, 2013.
The fact that the overall percentage of women occupying senior roles in Indian boardrooms is
merely 8.5% in 2019, is a testimony to the fact that many lacunae still exist in this policy. India
ranks at 23 out of 56 countries globally in terms of the presence of women in boardrooms.
Are women quota’s efficient?
While this provision clearly seem to be an efficient step towards achieving gender equality, the
compliance by companies reveals otherwise. The National Stock Exchange (NSE) reported that
out of 1,723 listed companies, 1,667 companies had met the mandate of one woman director on
board. But out of this pool, women directors in 425 companies belonged to the promoter group
or family. The women directors who are being appointed to the board, are to merely meet the
mandate and do not fulfill the purpose of the legislation in its essence. That dilutes the very
purpose of giving more representation to women, and to assist break the glass ceiling that has
long held them back from reaching headship roles. Women empowerment is not something
where a woman can merely play a simple role in a corporate but should be a part of the higher
level of the decision making process.
Provisions under Companies Act, 2013:
As per the second proviso to Section 149(1) read with Rule 3 of The Companies
(Appointment and Qualification of Directors) Rules, 2014 (Chapter 11) following class of
companies are required to appoint a minimum of one Women Director:
∙Every listed company;
∙Every other public company having-
opaid-up capital of One Hundred Crore Rupees or more; or
oTurnover of Three Hundred Crore Rupees or more.
The time is given to the company for compliance with the provision:
When the provision of appointment of a woman director applies to the company, the company
shall comply with such provisions within six months from the date of its incorporation.
Intermittent Vacancy of a Woman Director:
Any intermittent vacancy of a woman director shall be filled-up by the Board at the earliest but
not later than:
∙Immediate next Board meeting; or
∙Three months from the date of such vacancy.
Further, a Woman Director can be an executive director or a non-executive director. A woman
director can hold the position of a director until the next Annual General Meeting from the date
of appointment. She is also entitled to seek reappointment at the general meeting. It is pertinent
to note that the tenure of a woman director is liable to retirement by rotation (Sub-section 6 of
Section 152) similar to other types of directors.
Provisions under SEBI (Listing Obligations and Disclosure Requirements), 2015:
As per Regulation 17(1), the board of directors shall have an optimum combination of executive
and non-executive directors with at least one woman director and not less than fifty percent of
the board of directors shall comprise of non-executive directors;
What are the Roles and Responsibilities of Women directors?
The roles and responsibilities are the same as that of any other director. A woman can act as an
independent director who is responsible for improving the corporate credibility and also
improving governance standards of the company. Also, women directors can be appointed as a
nominee director who mainly looks after and represents the interests of the appointee. An
appointee can be a stakeholder, a creditor, or a shareholder.