This article is written by Ipsita Rout, 4th Year student of KIIT School of Law and curated by Himanshu Raj of CNLU Patna.
Corporate boards are critical governing and management bodies and their productivity dictates the success of a corporation. The board is a central aspect of the framework of corporate governance and the effectiveness of the management and monitoring of the organization is measured by its productivity and profitability. The board is used as a liaison between equity suppliers (shareholders) and executives who use this money to extract value. The task of the board is to represent, formulate and satisfy shareholders’ wishes and desires as the owners of the businesses. Inevitably, the controversy surrounding female representation in industry must relate to their inclusion on corporate boards. It is also a credible measure of the agenda and development of gender equality embraced by countries and businesses.
In a survey by catalyst workplaces that work for women, it was found that globally only 20% of directors were women in 2019, which was an increase of 2.1 % from the previous year. Women are not just facing gender discrimination in but their work spheres but are condemned for their lack of physical fitness, are already labelled as token in the board dynamic industry. Tokens are a visual reminder of how the company believes in diversity across all genders, but when you scrutinize and look into the matter in general, you will find that the tenure of the women is lower than that of male employers. There are still differences in pay grade and the choice of women is only done to showcase that the company is following no gender discrimination for its recruitments.
In 2019, Australia had 31.2% women on boards, Canada had 29.1%, France had 44.3%, Germany had 33.3%, India had 15.9%, Japan had 8.4%, Netherlands had 34.0%, Sweden had 39.6%, Switzerland had 29.9%, United Kingdom had 31.7% and the United States of America had 26.1% women on the boards. (Catalyst global survey 2020)
The above statistics however do show an increase of the percentage of women on boards in all the countries from the previous years, but you can notice that the representation of women is not something that is taken seriously in the corporate industry.
WHAT CAN BE DONE?
According to Victoria Medvec, Professor of Management and Organisations, Kellongg School of Management – Companies are keen to add female directors as board recruiters would gladly report their female hires. Nevertheless, there are also professional woman executives who ask, “Why isn’t my phone ringing?” “This is the aspect of the mechanism that should be proactive for women. Unless a woman is a sitting CEO, being selected as a director nominee involves honing a “value proposition,” which is the special value she adds to a board, a widely coveted expertise that speaks for itself.
But the irony is, rather than the CEO, there are also men sitting on boards that hold senior leadership roles. And why, then, in terms of board service, are women held to a particular, higher standard? The sad reality of corporate life may be one reason why men are always rewarded on the basis of their ability, while women are promoted on the basis of their achievements. Therefore, if women have not proved themselves as CEOs first, they might be less likely to be accepted as candidates for director.
Unfortunately, all the progress that we need for women in the corporate industry will take years to reach. However, this slowness hides what I consider to be true change. Women occupied 15.7 percent of board seats in large corporations in 2010; today, it has risen to about 20 percent. But there has been a much greater rise in female directors than the figures at first sight would reveal. A decade earlier, sitting on as many as six or seven boards was not unusual for directors. The women who also sat on several boards were counted many times, in effect (as were their male counterparts). Today, directors are sitting on smaller boards due to more strict compliance criteria, such as Sarbanes-Oxley. This suggests that there are far more actual female directors in the mix, which reflects a positive trend in the diversity of board gender diversity. The approach should not be mandatory requirement specific, rather merit specific. This is where the ‘Value Proposition’ concept checks out.
When you buy a packet of chips, dates or fruits in the market what do you see first? We check the expiry date at the back, the nutrient content, the quality, and the packaging, right? Just like that the board recruiters look at the value that you can add to the company and how you manage the reputation of the company when everything goes south. True that woman does not have a minimum of 50% representation of boards globally and as tragic as this fact is, there is something that can be done about it. Leading by example is always something that makes your answer have safety. When you have more information and experience on something nobody can question you on your methods, you are not a beginner rather and expert on your research- the idea of value proposition adds more value and favourability to cause a woman to be ideal candidate for a position in the board. It is our turn to take back what’s ours as women, and change the boardroom dynamics. The sad part is few women cannot do it alone, but all of us together can make this reality and take back what’s integral for the development of the board dynamics. Years across from here, future researchers will study about the movement that began with the idea and birth itself to reality. Progress is just a mile away.