Diversity in Indian boardrooms: Women hold 17.1% of board seats, 4.7% are female CEOs, 3.9% are CFOs

Board seats held by women in Indian companies had gone up to 17.1 percent in 2021 from 13.8% in 2018, and at least 4.7% of chief executive officers and 3.9% of chief financial officers were women, according to consulting and auditing company Deloitte India.

But the number of women occupying the chairperson’s position has gone down recently. Only 3.6 percent of board chairpersons were women in 2021, against 4.5% in 2018. The comparative figures were 3.2% in 2016 and 2.7% in 2014.

The finding, released on February 8, showed that women held 17.1 percent of board seats in India, an increase of 9.4 percent from the 2014 edition of the Deloitte report, the year when the Companies Act, 2013 clearly articulated the need for more women members on corporate boards.

The progress is slow both in India and elsewhere. Globally, 19.7 percent of board seats were held by women, an increase of 2.8 percent since 2018, and at this pace, the world can expect to reach near-parity only in 2045, according to Deloitte.

While 3.9% of CFOs in India were women in 2021, up from 2.5% in 2018.  The consulting company analysed 340 companies in India. The percentage of women CEOs in 2016 was 3.4%.

“While the Indian regulators have set up a holistic framework to encourage the representation of women in key positions at corporates, the numbers suggest a significant gap between the ideated measures and ground realities. With the continuing disruption and the current pace of change, the case for diverse boards that work with a unified purpose is becoming stronger than it ever was. It is time that gender diversity and gender parity get more focused attention from Indian corporations,” said Atul Dhawan, chairperson of Deloitte India.

Among other findings, the consulting company said the average age of women board members in India is 57.4 years while the average age of men board members in India stands at 61.1 years.

Fewer women on more boards 

Deloitte India said fewer women are serving on more boards. In 2021, the stretch factor for women increased slightly from the 2018 figure of 1.22 to 1.30 in India, the same as the global average. It means that compared with men, a smaller group of women are taking on more board seats. Men, by comparison, have a stretch factor of 1.2, the company said.

The global stretch factor metric of Deloitte examines how many board seats an individual holds in a particular market. The higher the stretch factor, the greater the number of board seats the same director occupies.

Globally, the stretch factor for women on the board increased slightly, from 1.26 in 2018 to 1.30 in 2021. This was almost similar to 2016, when the stretch factor was 1.31 globally.

Are women board members serving fewer years than men? 

Women are occupying board seats for fewer years than men in India and elsewhere. The average tenure of a woman board member has gone up to 5.1 years in 2021 against 5 years in 2018, Deloitte India said. In contrast, men served on the board for an average 8.1 years.

Globally, this slipped in 2021; the consulting firm observed a decline in the average tenure among women directors in comparison to that of men.

Average global board tenure for women slipped from 5.5 years in Deloitte’s previous edition to 5.1 today. This was 7.7 years for men in 2021 globally. This was particularly apparent in the US, where the tenure of women declined from 6.3 to 5.3 years, Canada (from 5.7 to 5.2 years), and the UK, where it slipped from 4.1 years to 3.6 years.

“In large part, this can be explained by the greater number of women on boards in the first place. This is particularly true in the United States, which saw an increase of more than 6% in the number of women on boards but also a decrease in tenure of one year, affecting the global average,” the Deloitte report said.

“The most probable explanation is that more women have joined boards in recent years, and they have had less time to accumulate experience. Or it could be that women who are retiring or rotating out of board service are being replaced by other women, further decreasing average tenure. On the other hand, we also see declining tenure in a few countries where the number of women joining boards has undergone little change since the last edition,” the report said.