Women on Corporate Boards: A Move Towards Corporate Sustainability or Regulatory Compliance

Remarkable strides in workforce and board representation for women are still accompanied by challenges in the corporate sector. Such challenges remain despite research evidence supporting the business case in relation to gender diversity on corporate boards and the introduction of mandatory gender quotas in different countries. India has regulated women’s representation on corporate boards through the Companies Act of 2013 and the Securities Exchange Board of India (SEBI).

Using data from the CMIE ProwessQ, Bloomberg database, and the companies’ annual reports for India’s top 500 companies, the study evaluates women’s representation on corporate boards in India for ten years, from 2010 to 2019. Gender diversity on boards is evaluated using the number and percentage of women on board and the two popular diversity indices, Shannon’s and Blau’s.

The study finds that regulatory intervention has positively improved gender diversity on Indian corporate boards. However, the growth in such representation appears to be more compliance-based and not driven by the objective of inclusiveness and women empowerment necessary for corporate sustainability. Due to tokenism in appointing women directors, the boards have not achieved the critical mass essential for their effective participation.