December 13, 2023, Mumbai – Russell Reynolds Associates (RRA), a global leadership advisory and executive search firm, unveiled 'Deciphering the Indian Boardroom,' a compelling report focused on the board demographics of India’s Top 200 NSE-listed corporations. These corporations collectively represent over 80% of the total market capitalization of all listed companies. The report offers a comprehensive examination of board structures and governance practices, providing valuable insights and drawing insightful comparisons with global counterparts.
The findings highlight a crucial observation - only 54% of directors are classified as independent, trailing significantly behind the robust independence observed in the FTSE 100 (73%) and the S&P 100 (86%). The disparity underscores the opportunity for Indian corporations to increase independence on Boards, increasingly aligning with global standards on governance practices.
Despite India's early adoption of gender quotas, the report starkly illustrates that women occupy a mere 19% of board seats in the top 200 NSE-listed companies. This pronounced gender disparity, particularly in comparison to global counterparts like the FTSE 100 where women hold 42% of board seats, signifies a substantial opportunity for improving the metrics & not sticking to regulatory norms only. The report however highlights a positive trend in the inclusion of external women directors, propelled by regulatory mandates requiring at least one independent woman director on listed boards. While women comprise 27% amongst independent directors, they constitute only 10% amongst executive directors, pointing to the need to structurally address gender diversity issues in corporations to provide more opportunities for women to rise to the Board.
Sanjay Kapoor, a consultant at Russell Reynolds Associates, said “The 'Deciphering the Indian Boardroom' report serves as a strategic compass for Indian boards, outlining the roadmap for both present and future boardrooms. Good governance is an ever evolving process and snapshots like these allow relevant cross country comparisons, triggering aspirations to “better the best”.
Amit Jaiswal, consultant at Russell Reynolds Associates, emphasized, “There is a tremendous opportunity for India Inc to reimagine what their Board composition should look like in the next three to five years, and if it will be reflective of the diverse stakeholders the business serves. Demographic diversity on the Board can lead to more thorough and well-rounded discussions, better risk management, and more strategic decision making.”
The report also exemplifies the age dynamics of board members, in India, highlighting a shift towards hiring younger talent. With women board members in the top 200 companies averaging 59 years compared to their male counterparts at 62, it appears that women are joining Boards at a younger age than their male counterparts. Further, whilst the average age of board members is 61 years, the range spreads between 26 to 94 years.
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