‘Women Independent Directors is the way forward and it can’t be just a One on Board Club! ‘
Ms.Rupa Vora, former group Director and CFO Of IDFC Alternatives, Independent Director on Corporate Boards,Member – CII National Committee on Financial Reporting 2020-21 shares her insights on women in corporate boards with Exito Media Concepts.
Diversity and Inclusion are not just good to have, they are a must have and it has been proven time and again that diversity makes economic sense! We limit the discussion today just to gender diversity, as the need for gender diversity is so apparent!
With risks changing so rapidly, a balanced board that considers different perspectives and has representatives from 50% of the work force that make about 80% of the consumption decisions; is definitely more equipped to make better decisions to build a sustainable enterprise that stands the test of the time.
So, the economic case for Women on Boards is proven. In spite of this, why did we need regulation to get just one woman on corporate boards?
Corporate Boards have been old boys clubs! Board seats were for life! With the Companies Act 2013, a lot has changed and now Boards are forced to look out for woman directors – Are these women directors relatives of Board members/promoters who play a subdued role on the Board? Just a saree or skirt in the Board Room or are these women with the right skillsets and an independent mindset that could have their voice heard at the table and help in sound decision making?
Women Independent Directors is the way forward and it can’t be just a One on Board Club! For balanced decision making at least 1/3rd of the Board should be women! Be the first woman on the Board, but be an advocate for change!
We find some women are on multiple Boards and others still waiting to get in! So what is it? Why is it that they are not visible? Is it a lack of networking or not enough rigour in the process of inducting new board members? Is the NRC doing its bit in mapping skill sets of the board members and searching for the right candidate with as much fervour as you would for a C-Suite recruitment? or is the risk reward so skewed that women are not ready to take up board positions?
Schedule IV to the Companies Act 2013, for the first time codifies the duties and responsibilities of Independent Directors and is onerous! It is only after a lot of representations, that in March 2020, the Ministry of Corporate Affairs issued a standard operating procedure for prosecution of Independent Directors (IDs) and Non-Executive Directors (NEDs) in respect of non-compliance with the provisions of the Companies Act 2013, This is a step in the right direction!
So should women in finance shy away from Board positions? Definitely not!
Before joining a Board do a thorough due diligence on:
- The Purpose, Vision and Mission of the company.
- Understand the business of the company and the value drivers.
- The current composition of the Board and the reason for the vacancy.
- The Management team – meet with the Chief Financial Officer, Chief Risk Officer, Internal Auditor – the conscience keepers of the company.
- Check if the company is Private Equity (PE) backed, generally the governance level is refined in PE backed companies.
- Check who the auditors are, the audit reports for any qualifications, any legal cases pending, related party transactions etc.
- Check out news reports.
- Get a sense of the culture of the organisation.
- Check the Directors & Officers’ insurance policy of the company.
- Check the letter of appointment of other ID’s etc.
Needless to say, if you want to be an Independent Director – Be Board Ready!
Get your DIN. Register yourself with the Independent Director’s Data Bank. Assess if you need to go through the online proficiency test for appointment as an ID. Join networking groups of Board Directors that discuss board issues.
Introspect if you have the passion for corporate governance and have an independent mind set, can contribute time and be prepared for board meetings, and can influence change to ensure the company moves up on the corporate governance ladder. Remember, the Risk Reward is skewed! Ensure you join the right boards! The Reputation Risk is high.
To sum up; women in finance shouldn’t shy away from board directorships; just take informed decisions!
Board directorships give you a chance to network with a diverse set of people, get their perspectives on risks and their perception about the future.
Directorships enhance your leadership skills as it is all about collaborative decision-making in the best interest of all the stakeholders.
You need to be a good listener and influence change without being a roadblock!
Women in finance need to Be Board Ready, Take up board directorships and contribute to good corporate governance!
Ms. Rupa Vora is a Charted Accountant with over 3 decades of experience in finance. We are honoured to have her on the advisory board of the 19th Edition of the CFO Leadership Summit happening on the 18th of February 2021.
The CFO Leadership Summit will host 200+ finance leaders from across industries in India and serve as a platform for in depth peer-to-peer engagement and networking.