Women Directors: An Analysis of the Role and Impact of Women Directors under the Companies Act 2013

ABSTRACT

In recent years, there has been an immense focus on the role of women in the corporate sector. This is largely because women are increasingly making their presence felt in the corporate environment, and this has led to a greater focus on their role in the boardroom. The Companies Act, 2013 is one of the most constructive pieces of legislation in India, and it has had a crucial and impactful role concerning women directors. Despite the legal obligation, women directors overcome several obstacles in the corporate world. Businesses should continue to work towards creating a more diverse and inclusive workplace environment because women directors can improve a company’s performance and reputation by bringing valuable talents, perspectives, and experiences to the boardroom. However, there is still a long way to go before there is gender parity in the boardroom.

INTRODUCTION

The appointment of female directors to boards is a step in the right direction towards broadening the gender diversity of company leadership roles. The goal of the Companies Act, 2013 is to establish a thorough framework for Indian Company regulation. The role of Women Directors has been greatly impacted by this noteworthy piece of legislation. The strength of the feminist approach to the workplace demonstrates that women are just as capable of succeeding in the boardroom as men are, given the opportunity. The modern world and a fully equitable and empowered workplace are made possible in large part by the feminist perspective on the workplace.

THE PROVISIONS RELATED TO WOMEN DIRECTORS UNDER THE COMPANIES ACT, 2013 ALONG WITH RELEVANT SECTIONS AND PROCEDURES:

It is required that at least one Women Director be appointed “Every listed company and every public company with a paid-up share capital of Rs. 100 crore or more, or a turnover of Rs. 300 crore or more, shall have at least one women director on its board” states Section 149(1) of the Companies Act, 2013.

The following steps are involved in appointing a women director:

• The process of designating a women director entails the completion of Form DIR-2, which is necessary to verify her willingness to join the company’s board, and Form DIR-8, which is necessary to inform the company of her disqualification.
• The company should call a general assembly and ask the shareholders to approve the nomination of a female director during the assembly to be present.
• Following the nomination of the Women director by the general meeting, the company must submit the following paperwork to the ROC within 30 days from the date of the general meeting’s adoption of the appointment resolution, complete Form MGT-14.
• Listed firms are required to post the general meeting proceedings on their website within two working days and to submit the general meeting procedures to the stock market within 24 hours of the general meeting’s end.
• After a Women Director is appointed, You must file Form DIR-12 with all the information about the appointment within 30 days.
• The company needs to finish filling out Form MBP-4 entries in the director and key management staff registers, as well as the contracts the female director is interested in.
• Any intermittent vacancy of a women director shall be filled by the board at the next board meeting or, if earlier, within three months of the vacancy date. A women director may have the position of executive or non-executive.

Timeframe for appointment: “According to Rule 3 of the Companies (Appointment and Qualification of Directors) Regulations, 2014, the woman director must be appointed within a year of the day the rule became effective, or April 1, 2014.”

Qualifications and disqualifications: The woman director must have the same qualifications, disqualifications, and eligibility criteria as any other director of the company, as per Section 149(6) of the Companies Act, 2013.

Board meeting and resolution: The appointment of a woman director must be made by passing a resolution at a board meeting or through a resolution by circulation as per Section 161(1) of the Companies Act, 2013.

Intimation to Registrar of Companies (RoC): Once the appointment is made, the company must file the necessary e-forms with the RoC within the stipulated time frame, as per Rule 12 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Tenure, powers, and responsibilities: As per Section 149(4) of the Companies Act, 2013, A woman director’s appointment is valid until the next Annual General Meeting (AGM) following the date of appointment. She is eligible for re-appointment at the next general meeting. Nonetheless, like with other directors, the tenure of a woman director is subject to retirement by rotation under Section 152(6) of the Act. She can also resign at any time by giving the company notice.

Penalty for non-compliance: If a company fails to comply with the provisions of the Companies Act, 2013 regarding the appointment of a woman director, the company and every officer of the company who is in default shall be liable to a penalty, as per Section 172 of the Companies Act, 2013. The penalty may vary based on the duration of the non-compliance.

“The Act does not specify any explicit penalties for not appointing a woman director. Hence, if a woman director appointment is not made, the Act’s Section 172 penalty will be imposed. According to Section 172 of the Act, any official or entity in default would be subject to a fine that cannot be less than Rs.50,000 but may not exceed Rs.5,000,000.”

WHY IS THERE A REQUIREMENT OF WOMEN DIRECTORS?

The Companies Act, of 2013, provides an overall framework for the rules and regulations for companies in India. The Act mandates that companies should have at least one woman director on their board. This is a pivotal change from the previous Companies Act, as it did not have any specific provisions regarding the presence of women directors on boards.

The presence of women directors on boards is beneficial for several reasons.

Firstly, it helps to ensure that the boardroom and corporate sector is diverse and represented with gender equality. This is important for several reasons, including the fact that it ensures that the board can understand the needs and concerns of a wider range of stakeholders. Additionally, it helps to ensure that the board can make decisions that are more reflective of the population as a whole.

Secondly, the presence of women directors on boards can help to ensure that the company is more effective and efficient in its decision-making process. This is because diversity in the boardroom helps to ensure that a wider range of perspectives and views can be taken into account when making decisions and understanding the board with an effective point of view. Additionally, it helps to ensure that the board can make decisions that are more reflective of the population as a whole which is uplifting for the company. The presence of women directors on boards can help to ensure that the board is more accountable to shareholders. Boards that are more diverse and inclusive are more likely to be held to a higher standard of accountability. This is because diversity in the boardroom helps to ensure that a wider range of perspectives are taken into account when making decisions.

Companies that prioritize inclusivity and diversity in work culture have a high performance rate which ultimately helps the company to achieve the target, concerning the compliance of the act and framework if the company adapts to this it results in advantageous and gainful ways also empowers today to work hard and women to secure their position on the board.

FEMINISTIC APPROACH: WOMEN DIRECTORS IN BOARDROOMS

The patriarchal operations build up the pressure of difference when it comes to what society expects of what work males need to do and what females need this brings a whole issue of women in the workplace. There is an opportunity to have your place in a broad room but with opportunity, there is also a need for equality between males and females in all situations, there should not be a superior perspective when it comes to respect and pay for all. It is noticed a woman is less paid or less respected because a male in the corporate world is expected with a higher authority rather than a female this is a negative conation there should be fairness and equality in this modern time. The corporate world has tried to make certain rules and changes to keep it fair for everyone in this field. Companies Act, 2013 plays a significant role for the Women Director concerning section 149(1) as it gives a company a mandate for their appointment but there should be the same and equal level of opportunities delivered to them as well, females with a high potential and work ethics can bring so much to the table in this modern time and new era. Due to disparity and inequality in the board rooms, the fight for gender equality is fuelled by the concept of feminism a very important concept of today’s time. Women in today’s time are allowed to represent and hold a position of leadership in the corporate sector. The main goal of the feminist approach is to have equal positions and playing field regardless of gender this approach seeks to eliminate gender discrimination and empower women to take on leadership roles in the boardroom as equally and similarly as with the mindset kept in mind for the men. 

In a board room where choices made and the decisions taken have an impact on the entire company, this strategy is extremely crucial. Organizations may guarantee that decisions are made with the company’s best interests in mind by understanding the significance of gender equality in the boardroom. Given that women make up half of the population, they must be equally represented in places of power, including boardrooms. The number of women in boardrooms is one area where there has been significant development in recent years, as a result, decisions become more inclusive and diverse from the point of view and experiences of women are taken into consideration.

A feminist perspective challenges gender norms and traditional roles that may restrict the opportunities available to women. Women directors in boardrooms can dispel these preconceived notions and develop new female role models for upcoming generations of women.  In addition, to perform the rules and the ethical thing to do, organizations have a duty to advance gender equality to diversify the working environment by coming up with strategies that can assist companies in upholding their corporate social responsibility by advancing diversity and gender equality in the workplace. This is crucial to establishing a truly equal workplace, and it is crucial to the feminist approach to the workplace, the feminist approach to women in boardrooms has been instrumental in creating a leveled playing field for all employees. This approach seeks to deduct any gender discrimination and empower women to take on leadership roles in the boardroom.

CONCLUSION

The Companies Act 2013 has moved the Lense on female diversity and inclusion in the corporate spectrum, It is crucial to address the problems that female directors encounter and to adopt a supportive environment in which they may thrive and grow. Women should be there in the board discussions given equal respect as men with taking accountability concerning their potential and not discriminate just by their gender it shall be a free and fair workplace environment, keeping all the important aspects in mind to improve corporate governance and advance gender equality at work, among other beneficial developments and changes. Promoting gender equality and strengthening women, including their presence in boardrooms, requires a feminist perspective. It improves company results, eliminates stereotypes, and satisfies corporate social responsibility.

REFERENCES

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Jawla, C. N. (2020, July 10). All about Woman Director under the Companies Act 2013. Taxway Global. https://taxwayglobal.com/all-about-woman-director-under-companies-act-2013/

Balasubramanian, G. (2021, May 9). Feminist Critique: Woman Director under Companies Act- Academike. Academike. https://www.lawctopus.com/academike/women-director-ca/

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