Swagat Dash
India’s Companies Act of 2013 and subsequent SEBI regulations mandated female board representation in listed companies. While the reforms boosted the percentage of women on boards—from around 5% in 2013 to over 18% by 2025—the depth of change remains limited. Evidence from institutional reports shows that many women directors are still promoter-affiliated, highlighting tokenism rather than transformation. This blog examines the shortcomings of these reforms and outlines steps toward meaningful inclusion.
The Legislative Mandate: A Shift in Regulation
The Companies Act, 2013 introduced Section 149(1) along with rules, mandating that every listed company and certain large companies must appoint at least one woman director. SEBI’s LODR Regulations later required independent women directors in the top 500–1,000 companies based on market capitalization. These reforms created a legal basis for gender inclusion in boardrooms long dominated by men.
Surface-Level Gains: Real Numbers, Context Missing
By March 2025, women held around 21% of board seats in NSE-listed companies—totaling 3,479 directorships across 2,133 firms—while 97% of these companies had at least one woman director, and 48% had two or more, according to a Prime Database–Economic Times report.
In parallel, Financial Express (March 2025) noted that female representation quadrupled from about 5% in 2013 to over 20%, yet women remain underrepresented in executive roles, with fewer than 5% serving as MDs or CEOs and around 10% as executive directors.
Tokenism: Appointments Without Authority
An analysis by Financial Express based on Biz Divas Foundation suggests that close to 50% of women directors appointed since 2014 were relatives of promoters, revealing how many firms satisfied quotas while maintaining control structures.
Further, former SEBI chair M. Damodaran criticized tokenistic board appointments, calling the phrase “independent woman director” legally nonsensical and indicative of compliance-first thinking.
These patterns suggest that many women are appointed to board positions for legal formality, without significant influence or decision-making autonomy.
Patterns of Minimal Compliance
A 2023 proxy advisory report highlighted that around 45% of Nifty-500 companies had just one woman director, sticking to the legal minimum. Only a minority exceeded that threshold. According to the same report, while independent directors now make up about 50% of board seats overall, real diversity is stymied by reliance on personal networks—often male—when recruiting outside the promoter circle.
Executive Roles: Women Are Still in the Backseat
Even as board gender ratios improve, women’s presence in executive roles remains minimal. A 2021 Financial Express story reported that among female executive directors, only 31% were hired as professionals, while the remaining 69% were promoter-affiliated.
This underscores that even within executive board positions, merit-based appointments are thin—a troubling sign for anyone imagining the reforms would open leadership paths.
Why Reform Fell Short
Tokenism persists for several reasons:
First, India’s corporate landscape remains dominated by promoter-driven ownership, allowing controller families to meet gender quotas through female relatives, without relinquishing power.
Second, a lack of structured searches for qualified external women leads to over-reliance on existing male networks when identifying new board candidates.
Third, enforcement of penalties for non-compliance is weak, meaning firms have little incentive to go beyond minimal compliance.
Lastly, women directors—even those not linked to promoters—historically report challenges with board influence, committee assignments, and true participation.
What Real Change Requires
To move beyond superficial change, policymakers and companies must:
- Require disclosure of relationship with promoters for all board appointments.
- Enforce transparent nomination policies to widen the candidate pool beyond familiar circles.
- Track board involvement metrics—attendance, committee positions, influence—not just seat count.
- Encourage institutional investors and proxy advisors to push for independent female directors from professional backgrounds.
- Invest in mentorship and capacity-building for women in leadership roles.
Conclusion: Mandates Must Mean More Than Numbers
The Companies Act, 2013 and SEBI’s reforms created a legal framework for gender diversity in Indian boardrooms. But across listed firms, much of the progress has been symbolic—limited by promoter control, token appointments, and shallow compliance. For India to achieve genuine gender-equitable governance, its reforms must evolve beyond quotas into systems that ensure women are appointed based on merit, contribute fully in strategic roles, and hold real seats at the decision-making table.
References
- Economic Times (March 2025): “Women hold 21% of board seats at NSE-listed firms…”
https://economictimes.indiatimes.com/jobs/c-suite/at-nse-listed-companies-women-hold-21-of-board-seats-at-nse-listed-firms-report/articleshow/118788382.cms - Economic Times BFSI via Damodaran (January 2022): “Women directors mandate tokenism…”
https://bfsi.economictimes.indiatimes.com/news/industry/women-directors-mandate-tokenism-regulation-wording-humorous-damodaran/88746302 - Financial Express (August 2016): “Number of women on board rises; but so does tokenism”
https://www.financialexpress.com/business/industry-number-of-women-on-board-rises-but-so-does-tokenism-report-358080/ - Financial Express (March 2024): “Boards more diverse, but tokenism still prevails”
https://www.financialexpress.com/business/industry-boards-more-diverse-but-tokenism-still-prevails-3417591/ - Financial Express (March 2025): “Fourfold jump in women’s share in corporate boards since 2013”
https://www.financialexpress.com/business/industry/fourfold-jump-in-womens-share-in-corporate-boards-since-2013-3770952/ - Financial Express (May 2021): “Breaking Ground: … few are in executive roles”
https://www.financialexpress.com/business/industry-breaking-ground-new-rules-see-more-women-directors-but-few-are-in-executive-roles-2252975/
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organization .
About the Author
Swagat Dash, Assistant Professor, Birla Global University, Bhubaneswar – LPPYF Law & Public Policy Youth Fellowship- Cohort 5.0
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