Corporate oversight is crying out for diversity

Is gender a human construct? From social media to academia, this is a subject of fierce argument. Those who insist that biology is destiny, as patriarchal set-ups have done down the ages, are plain wrong and must be called out for it. The burden of gender inequity has been so heavy that our struggle to offload it has made some of us deploy all we’ve got—even semantic signals, like pronouns. If we subvert the use of ‘she’ or ‘he’, goes the hope, language itself would score a point against how society conditions us to fit into such moulds. Yet, while gender is a figment of society—a social construct—in most settings, this is simply not so in every context. Moreover, we need not deny the existence of our chromosomes to defy unfairly assigned roles. In fact, tactical attempts to scrub terms like ‘female’ and ‘male’ of their meaning could end up going against affirmative action to fix lopsided equations of power. This is an issue of practical concern in many fields, and especially in the field of business, where gender diversity holds undeniable value but efforts to unlock it have been woefully weak.

A report released by Institutional Investor Advisory Services of a study it did with APG Asset Management has revealed very few women among individuals entrusted with the governance of Indian companies. By its data, less than 18% of all directors on the boards of our 500 most valuable companies listed on the National Stock Exchange were female at the end of fiscal 2021-22. While this was far better than 6% at the close of 2013-14, the year when India effectively outlawed all-male boards for big firms, it was only fractionally more than the figure three years earlier. This points to a premature plateau in our progress towards better balanced boardrooms. At this pace of change, said the report, “India will take till 2058 to achieve 30% gender diversity on boards.» It is not as if no further push was made after the legislative shift of 2013, when the Companies Act made female presence a must. Our stock-market regulator, the Securities and Exchange Board of India tweaked its rules in 2019 to say that each of the top 500 had to have at least one independent director who is a woman. The purpose of this was to keep women relatives from being appointed in a cynical tick-the-box exercise. As the goal was to improve corporate oversight, such an appointee’s agency had to be assured by distance. Yet, for some reason, the overall board presence of women appears to have grown only a bit in the past three years.

It’s a matter of dismay that board diversity has been driven by state policy more than business ambition, as the pattern so far suggests. Much global research shows that companies under diverse guidance tend to perform markedly better. Admittedly, it isn’t easy to tell causation apart from correlation in some of these studies. Better-run businesses may also be more open on the whole. Still, success and openness are broadly observed to reinforce each other. When it comes to oversight functions, this factor should count even more, as the big failing of monocultural management is groupthink. Which is exactly what a balanced board guards against. Being male, specifically, is a clear predictor of closed-club antics that dyed-in-the-wool members might not even be aware of. As with war, male domination of business has been assumed as ‘the way it is’ for so long that every fifth business director being a woman may tempt some higher-ups to think this is about as good as it gets. Well, no. It’s just another man-made model, that’s all.

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