Gender Gap in Corporate Positions : Daily Current Affairs

Why in News?

  • In a monthly review, Ministry of Corporate Affairs (MCA) noted that gender gap in the Indian corporate sector is high among the top positions, but the situation is better off among independent directors and is improving.

More on News:

  • As of October-end, about 5,000 women independent directors have been registered in the country, accounting for nearly a fourth (23.6%) of all independent directors registered in the country. accounting for nearly a fourth (23.6%) of all independent directors registered in the country.
An independent director is a non-executive director of a company who helps the company in improving corporate credibility and governance standards.
  • He or she does not have any kind of relationship with the company that may affect the independence of his/her judgment.
  • The term “Independent Director” has been defined in the Companies Act, 2013.
  • However, the share of women in senior and managerial positions remains low at 14.6% of these positions.
  • Also, as per World Economic Forum’s global gender gap report 2021 there are only 8.9% of firms with female top managers in India.
  • The review said the number of women directors, including nominee and whole-time directors, on the boards of companies saw an increase from 266,361 in 2014 to 298,923 in 2020 after the Companies Act got notified in 2013
  • The Companies Act, 2013, mandates that a company should have at least one woman director on its board.
  • Moreover, Uday Kotak committee established by SEBI, recommended for at least 50% (currently one-third) of the board should have independent directors and compulsorily one woman among them.
  • In the case of key managerial personnel of companies, which includes managers, chief executives and chief financial officers, women representation improved from 272,974 in 2014 to 306,376 in 2020.

Reasons for lower representation of Women in Higher Roles:

  • India has one of the lowest female labour force participation rate (which dropped to 17.5% in 2017-18) in the world.
  • The dearth of talent may not be a reason behind this gap and the lack of access to the right opportunity at the right time may be a more fitting explanation.
  • Prior to the pandemic, the work culture was very rigid and non-flexible and organizations rarely made exceptions when one needed them to. This led to some talented individuals resigning from their jobs to cater to other critical tasks.
  • Another issue could be the lack of support on the personal front, because leadership positions require a lot of time, effort, and attention.

Conclusion:

Bridging the gender gap is the need of the hour, but it should be complemented by giving women the desired job profile, ensuring work-life balance, giving a safe working environment and, most importantly, changing mindsets.

The Companies Act, 2013

  • It is a legislation which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company.
  • The 2013 Act is divided into 29 chapters containing 470 sections.
  • Section 135 of the act introduces mandatory Corporate Social Responsibility.
  • National Company Law Tribunal (NCLT) is established under the Companies Act 2013 and was constituted on 1 June 2016.
  • National Financial Reporting Authority (NFRA) is established in March 2018 as an oversight body to investigate matters of professional misconduct by Chartered accountants or CA firms.