Project Report

On
“Evaluation of Role of Women Directors :

change from 1956 to 2013 Companies Act”

Submitted to:
Ms. Navita Aggarwal
(Assistant Professor)

Submitted by:
Ekta Chandrakar
B.A.LL.B. (Hons.) Student

Semester-VI, Section-C, Roll No.-62

Submitted on: April 06, 2018

Hidayatullah National Law University

Uparwara Post-Abhanpur, New Raipur-493661 (C.G.)
 Declaration

I, Ekta Chandrakar, hereby declare that the project work entitled “Evaluation of Role of
Women Directors : change from 1956 to 2013 Companies Act” submitted to the Hidayatullah
National Law University Raipur is the original work done by me under the guidance of Ms.
Navita Aggarwal, HNLU, Raipur and this project have not performed on the basis for the award
of any Degree or diploma and similar project if any.

Signature of the Student

II
 Acknowledgements

I, Ekta Chandrakar, feel myself elated, as it gives me immense pleasure to come with the work
on topic, “Evaluation of Role of Women Directors : change from 1956 to 2013 Companies
Act”. Words fail to express my deep sense of glee to my teacher, Ms. Navita Aggarwal, who
enlightened me on my every difficulty in completion of task. I acknowledge the blessings and
support which my mother and father gave in finishing of this task.

I would like to forward my hearty thanks to my University and Vice-Chancellor for providing all
the necessary requirements which aided me to achieve my goal. I also thank Librarian HNLU,
Raipur, for assisting me and allowing me to use the library of the University.

I feel a deep sense of thankfulness to all my seniors, my friends who helped me in achieving my
target.

Ekta Chandrakar
SEMESTER- VI
ROLL NO.- 62

iii
 CERTIFICATE

This is to certify that Miss Ekta Chandrakar, Roll Number- 62, Student of Semester- VI of B.A.
LL.B.(Hons.), Hidayatullah National Law University, New Raipur (Chhattisgarh) has undergone
research of the project work titled “Evaluation of Role of Women Directors : change from
1956 to 2013 Companies Act” in fulfillment of the subject of Corporate Law. The research
work is an original and bona fide research work carried out by her. The work is fit for evaluation.
Her performance in research work is up to the level.

__________________

Ms. Navita Aggarwal

Faculty – Corporate Law II
Hidayatullah National Law University, Raipur
Date – 06th April 2018

iv
 CONTENTS

Subject Matter Page number

Declaration ii
Acknowledgement iii
Certificate iv
Chapter 1- Introduction 1
Objective, Methodology, Problem, 2-5
Rationale, Review, Sources,
Chapterisation.

Chapter 2- Appointment, Need and 6-7

Term

Chapter 3- Role of Women Director 8-11

Chapter 4- Need of Women Director 12-13

Chapter -5 Suggestions 14
Conclusion 15

References 16

V
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CHAPTER : 1

INTRODUCTION

"You educate a man; you educate a man. You educate a woman; you educate a generation"

- Brigham Young

Our Indian constitution in its Preamble, fundamental rights and fundamental duties has
incorporated the principle of gender inequality but despite such equal rights given to both men
and women we have seen that Indian society is always male dominated and employment of
women is not preferred. Thus opportunities for women are limited. For example women are not
preferred in army force, in Air Force and in certain areas like combat field in flying zones.

But today the scenario has changed. You find women employed as Pilots, flying aircraft,
occupying top post in many companies be it a manufacturing sector or banking sector. Women
has also entered the board of rooms of many companies but in a limited way. In this scenario
Companies Act 2013 has made a provision for employing women directors on the boards of
listed companies and this is a welcome move. This is a step towards gender equity and it is
change in right direction. And thus the new Companies Act 2013 is a landmark in the history of
Corporate India which seeks to aim at ensuring higher standards of transparency and
accountability in corporate governance practices in India.

For better development of world at good pace women have to take initiative for development
hand have to come forward to work and to participate in Every Walk of life. women are not only
ambitious, talented, confident, educated but also more career oriented which help them to juggle
with the task management but also help them to maintain a fine balance between a personal and
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professional profile. the skill of being patience, negotiating, budgeting and good foresight help
them to accept challenges and to overcome barriers which help them to discover their own
identity.

RESEARCH METHODOLOGY

RESEARCH PROBLEM

The project aims to comprehend the research work carried out about women directors to identify
and highlight various issues, such as; status of women directors, factors hindering the growth of
women directors, benefits of having women directors, strategies to promote women participation
and directions for future research.

RATIONALE OF STUDY

In such an era of industrialization and modernisation, it becomes necessary to study and have
knowledge about women directors and their attributes depending upon the necessities of modern
time. Thus, this project tries to throw light on all aspects of women directors

OBJECTIVES OF THE STUDY

The main objectives of the study are,

1. To discuss the Role and need of Women Directors in a Company.

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2. To understand the challenges present and suggest solutions even after it is made a
mandate to appoint a Women Director in a particular class of Companies.

REVIEW OF LITERATURE

Many authors have studied the exigency and importance of Gender Balance in the board of
directors. The examples are evident more women on teams can increase and boost the
performance, there are plethora of examples: Citing private internal study of 20,000 client
teams, the vice chair of one of the Big four’s.1

According to Beth Brooke, the more diverse teams had higher profitability and great client
satisfaction than non-diverse teams and according to professor Anita Woolley and professor
Thomas W. Malone, increasing the number of women on a team also increases its collective
intelligence.

An associate professor from York University’ Osgoode Hall Law School has done a very
qualitative research on this subject for his book ‘Challenging Boardroom Homogeneity:
Corporate Law, Governance a Diversity’. Professor Dhir identified seven consequences of
gender-based heterogeneity for boardroom work, board governance, and group dynamics:

 Enhanced dialogue
 Positive changes in the behavior of men
 Improved decision making, including the value of dissent
 Higher quality monitoring of and guidance to management.
 More effective risk mitigation and crisis management and a better risk aversion behavior.
 Positive developments in theboardroom environment and culture
 Systematic and orderly board work

1
Ernst and Young
 Page |5

NATURE OF STUDY

“Doctrinal (Non-Empirical) Method of Research” has been relied upon for conducting the
research. For the purpose of research Books, Law Reporters, Case laws, Journals and other
references as guided by the Faculty of Corporate Law have been relied upon. It is a research of
analytical and descriptive nature .

SOURCES OF DATA

This research project is based on primary sources of data, however secondary & electronic
sources of data have been referred to a great extent. Books, case laws, journals & other reference
as guided by Faculty of Corporate Law are primarily helpful for the completion of this project.

CHAPTERISATION

Chapter 1 has introduced the research project by giving a brief introduction.. Chapter 2 focuses
on appointment, procedure and term. Chapter 3 and 4 deals with role and need of women
directors respectively. Chapter 5 deals with the suggestions.
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CHAPTER : 2

Section 252 to Section 323 of the Companies Act 1956 consent with the appointment of directors
and other aspects such as remuneration of directors, meeting of board of directors, vacation of
directors and their disqualification. A director has a control over management, conduct
superintendence and other affairs of the company. A company can appoint only single director of
a company can never be a employ or servant to the company. Directors are experts who are hired
by the company to manage its affairs.

In the case of Ferguson vs Wilson2, Court held that the directors are the agent of the company in
the eyes of law. Court also held that the company act only through their directors .When the
directors contracts on behalf of the company it is a company who will be liable not directors.

Appointment of women directors

The Government of India has enshrined multiple laws for the empowerment of women. The
corporate world is now getting more concerned about women and their participation in boards in
order to make General balance. Revolutionary step taken by government of India regarding
company which is registered under Companies Act 2013.

Proviso to Section 149(1)3 stipulates that Companies with such criteria to be announced shall
appoint woman directors.

a. Every listed company shall appoint at least one woman director within one year from the
commencement of the second proviso to Section 149(1).

b. Every other Public company: -

having paid up capital of 100 crores or more or –

a turnover of 300 crores or more

2
1939 Okla. 34
3
The Companies Act 2013
 Page |7

have to compulsorily appoint within 3 years from the commencement of second proviso to
Section 149(1) of the Act.

Moreover if there is any vacancy of women directors still to be filled then it shall be filled by
board of directors within the period of 3 months. The penalty for non-compliance of provision
extends to find of rupees 10000 with a further fine of rupees 1000 per day if the contravention
continues.

In the case of H.L. Roche and others vs Citizen Co-Operative Bank Ltd.4 and other it was held
that reservation of two seats for women members will be in addition to the existing no. of board
of directors.

Procedure for appointment of woman director

A woman director can be appointed during the time of company registration or after
incorporation by the board members and the shareholders.

Director identification number

Any person who wishes to hold the position of director in an Indian company must first obtain
director identification number which is a Unique Identification number for each director. A
woman director must first obtain DIN to become director of a company. In case a woman
director is being appointed during the company incorporation process itself, DIN will be
generated along with the incorporation certificate. No person can hold you require more than one
DIN.

Term of women director

A woman director can hold the position of director until next Annual General Meeting from the
date of appointment. She is also entitled to seek for reappointment at the General Meeting. The
tenure of women director is liable for retirement by rotation similar to other directors.

4
(1995) 97 BOMLR 546
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Chapter : 3

Role of Women Director

 Woman director has to play the role like any other director. Women can take up a role of
nominee director who will be nominated by a party in the company to take care of its interest.
Also, women can take up a role of independent director who is not liable to retire by rotation.

 Women directors should prepare them self study thoroughly make trips observation in board
meetings.

 To be more effective in the boardroom meeting she must do appear study of the company.

 Women directors should study the regulatory requirement of that company.

 Women directors of one company should have the meeting with the women directors of other
companies also. So that they can share knowledge on different aspects of Companies.

 Women directors should be well prepared before board meeting so that they will be confident
about sharing their independent views in board meetings. They will have to develop skills for
board effectiveness. The whole trust of women directors should be on network network and
network.

 Women directors can be effective in the board only when she explore the whole company, its
directors, Goodwill ethics and values of the company.
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Table No. 1 : Country wise percentage of Female Directors5

COUNTRY PERCENTAGE
INDIA 9.5
NORWAY 35.5
ENGLAND 22.8
CANADA 20.8
AUSTRALIA 19.2
JAPAN 3.1

According to Table No. 1 Norway stands first in employing female directors and Japan has
only 3.1% of female directors in company’s board. India’s figure is also less than 10%. By
introducing this clause of women directors in companies board, the percentage is going to
increase.

WOMEN DIRECTORS POSITIONS ON BOARDS IN INDIA

The following tables numbers 2, 3 and 4 shows that women directors are there as Chairperson ,
Managing Directors and on other positions of the Board in India but still the percentage is very
less.

5
Source: Indias’ figure BSE-200. Catalyst figures in percentages.
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Table No. 2 : Gender wise Categorization of Board Positions6

GENDER NO. OF DIRECTORS PERCENTAGE

MALE 2991 95.16
FEMALE 152 4.84
TOTAL 3143 100

According to table no. 2 out of total 3143 directors there are only 152 female directors in
the board positions. The percentage of female directors is just 4.84.

Table No. 3 : Designation of women directors as Chairperson/MD7

DESIGNATION NO. OF WOMEN PERCENTAGE

Chairperson 7 4.61
Managing director 5 3.29
Chairperson 1 0.65
Other Positions 139 91.45
Total 152 100

From Table no. 3, we can see the percentage of women directors as chairperson as 4.61% as
Managing Directors as 3.29% and chairperson and managing director was meager 0.65% and
other positions as 91.45%.

6
Source: Primedatabase.com pvt.ltd)
7
Source: Primedatabase.com pvt.ltd
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Table No. 4 : Gender wise status of Board Members8

Status Male Percentage Female Percentage Total

Executive 1062 33.92 68 2.17 36.09

Non 403 12.87 51 1.63 14.5
Executive
Non 1516 48.42 31 0.99 49.41
Executive
Independent
Total 2981 95.21 150 4.79 100

Table no. 4 shows that representative of men on various board positions as executives, non
executives and independent was 95.21 where as that of woman was merely 4.79%.

These results show that there is yet a lot of work is to be done in the directions of empowering
women on the board of directors of corporate in India.

8
Source: Primedatabase.com pvt.ltd
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CHAPTER : 4

Need for Women Directors

In today's condition it is the main question for women employment that why women should be
appointed in a workplace and how can they be helpful in management. Why in country like India
do we have to discuss about women employment not about men work. A prime reason according
to me is that women are always at work weather in home or in the office. Although of many
commitments they choose to get educated, take challenges and to compete with men. In this
process of responsibility at work and home, today woman has established their multitasking
abilities. And they have achieved the respectful position in the Indian corporate unit.

 Emotional intelligence : women possess higher emotional intelligence than men and have
good interpersonal skills which are essential for building support and to frame strategy and
have capacity to handle multiple task at the same time like reading their mails, talking on
phone. They also have capability of balancing their families and career simultaneously
effectively.
 Self branding attitude : women have a quality of being extremely passionate by nature and
very conscious about the choices and sharing their space. women has naturally the ability to
wait for valuable outcome. they also have a power to see the best side of a person, decision,
projects and other valuable things.
 Confidence : women have an insight confidence to compete in a business market. They do
their work with full enthusiasm. They also have ability to empower their fellow employees.
Despite the face many hurdles they find their ways to overcome and prosper. They can even
work in a stressful condition without facing much problem.
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Will women directors make an impact?

Lot of women are occupying key post in many companies and reputed private banks. Women
namely Nainalal kidwai, Chanda kochhar, Sheekaswarup, Kalpana Morparia, have earned a
reputation for leading successfully the banks as executive can also make an impact as women
directors. There is a vast talent but the mindset of corporate world has to change to come forward
to appoint women directors.

In India the addressing of the board of directors hold by women is acute yet significant. Women
seem to be a good manager but a poor Stake when it comes to the core management of the
companies. But in the present seen numbers of female participation in board and other top
managing position is increasing at negotiable rate. the amendment in companies laws in India
after 2015 had proven to be more efficient law ever made in comparison of previous companies
law before amendment. With the effect of the act many changes in Companies directors has been
noticed and many women has been appointed as the director of the company. Pallavi Shroff a
director on the board of automobile manufacturer Maruti Suzuki India Limited, Niharika Vohra
an independent director on the board of Zee entertainment Enterprises Limited, Rekha Shetty a
director on the board of Sun Pharmaceutical Industries Limited, Ekta Kapoor, chairperson of
Balaji production Limited, Arundhati Bhattacharya CEO State Bank of India are some of the
examples of the leading ladies who are doing a brilliant job in their respective fields.
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CHAPTER : 5

Suggestions for Good Corporate Governance

The section 149(1) of Companies Act 2013 is a good step towards women empowerment and
corporate governance, but still some more amendments are to be made. For better performance
of women directors and governance following suggestions are given :-

1. The law needs to be amended to ensure on boarding of independent women directors. This
will give the company the benefit of the knowledge and expertise of professional woman.

2. One woman on the board is definitely not enough. The number should be increased. In
Norway, there is 40% of board representation of women

3. Companies should appoint women directors for professionals and if companies are not a
appointing such professional directors, the law needs to be amended to ensure on boarding of
independent women directors. This will give the company the benefit of knowledge and
expertise of professional women.

4. Government should nominate women from trade unions also so that they will be interacting at
grassroot level.

5. Companies should move beyond the mandate being a more compliance requirement, to
effectively using a diversified and well qualified board to add value. Gender diversification is a
useful step for company boards to follow, it's equally important that it is accompanied with a
genuine intent to professionalize the board and improve the overall standards of governance.
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CONCLUSION

Gender bias has deterred many companies to induct women directors on their board. Now with
the new act requiring compulsory appointment of at least one woman director, companies will
have to search for good women directors within the time frame allowed.

But companies while applying this provision must invest in grooming women for board position.
Research has shown that companies with more women directors provide stronger business
performance. Men and women on board can leverage the differences to deliver higher standards
of corporate governance. Women can do and have a positive impact on board. There is a need to
get diversity of views in board rooms discussion and the same is impossible without the women.
Women are known to be careful, meticulous, intuitive, more focused on ethics and conduct, and
are prudent in reviews. Women directors are seen to be skilled at gathering information and are
not afraid to ask questions and have better communication skill, all of which makes for improved
interaction among Board members. They are the key to striking the right balance between short
term rewards and long term sustainability.

There about 6000 listed companies on the stock exchange and it will create a demand for women
directors. Let us hope that each competent women will stretch themselves and will represent as
many as companies as possible to meet the requirements.
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BIBLIOGRAPHY

 2020 Women on Boards, 2020 Gender Diversity Index, 2015 Key Findings, available at
https://www.2020wob.com/companies/2020-gender-diversity-index

 See Jenny Anderson, “Quotas Not the Best Way To Add and Retain Women for
Corporate Boards, Study Finds,” New York Times Dealbook, April 8, 2015, available at
http://www.nytimes.com/2015/04/09/business/dealbook/quotas-not-the-best-way-to-add-
and-retain-women-for-corporate-boards-study-finds.html?_r=0.

 See Aaron A. Dhir, “Corporate Governance and Diversity,” Aug. 19, 2015, available at
https://corpgov.law.harvard.edu/2015/08/19/corporate-governance-and-diversity/.

 https://www.indiafilings.com/learn/women-directors/

 https://www.corporate-cases.com/2014/04/woman-director-in-company.html

 https://www.caclubindia.com/articles/browse.asp

 http://indiacode.nic.in/actsinpdf/182013.pdf

 WWW.JURIP.ORG