Roshni Nadar Malhotra, Chairperson, HCL Technologies
Many of India's traditional business families have finally woken up to the huge upside that including and empowering women members can bring to their enterprises. Two years ago Roshni Nadar was named chairperson of HCL Technologies. Around the same time, Nisaba Godrej became the Managing Director of Godrej Consumer Products. At Reliance Industries, Isha Ambani as director, Reliance Jio and Reliance Retail, has been at the forefront of complex deal making as well as the launch of JioMart.
And not a day too soon. For their own good, traditional families are realising the tremendous gains from having female leaders. In a 2019 study published by Harvard Business Review, women were rated better leaders by those who worked with them when compared with men. A year later when the same agency did a similar study, it found that “comparing the overall leadership effectiveness ratings of men versus women, once again women were rated as more effective leaders. The gap between men and women in the pandemic is even larger than previously measured, possibly indicating that women tend to perform better in a crisis.”
Anecdotal evidence backs data from such studies.
At Apollo Hospitals, in the eight years since the sisters, Preetha Reddy, Suneeta Reddy, Shobana Kamineni, and Sangita Reddy took charge of the business, growth has been exponential. At Lupin, over the last nine years Vinita Gupta has steered the company’s journey to a successful $2 billion pharma giant with a strong presence across key markets outside India.
Besides releasing 50 percent of a hitherto leashed power, inclusion of women as potential heirs to leadership roles gives families more options.
But now there is an even more urgent reason for business families to shed their previous gender bias. It is clear that a shortage of skilled people will be one of the biggest challenges for companies in the coming years. Experts reckon it will actually threaten the survival of many. In such a scenario, companies that don’t work proactively to hire and nurture women employees, will progressively fall back.
In most parts of the world, women are outstripping men in tertiary education which is leading to an increasing role for women in business and industry. In addition, driven by regulation and governance norms, almost 75 percent of enterprises worldwide have equal opportunity or diversity and inclusion policies in place. Yet this has done little to fix the gender pay gap or even crack the glass ceiling for women leaders.
That’s where having women inheritors in decision-making roles in business families can make a crucial difference. Having women leaders has a trickle-down effect by increasing the gender diversity of the company as a whole.
Data from a two-year old ILO survey shows that the business case for gender-balanced workplaces is growing stronger all the time with two-thirds of companies surveyed agreeing that diversity initiatives improved their business outcomes. Indeed, at companies that have an inclusive business culture and policies to boot, the predicted probability of achieving increased profitability and productivity is 63 percent while the enhanced ability to attract and retain talent is 60 percent besides other equally significant gains.
The toxic masculinity of companies with all-male leadership, as is the case with many of the currently controversy-ridden startups, contrasts sharply with the more constructive culture of the few female-led startups that we have. A survey of more than 350 startups by consulting firm BCG along with Mass Challenge, the US-based global network of accelerators, revealed that women-run businesses deliver higher revenues, equating to more than twice as much per dollar invested.
Where tradition and dogma still hold back gender parity, it is the business, its shareholders both institutional and retail, and eventually society at large, that pays the price. Take the case of the Murugappa Group, not among India’s most dynamic and fastest-growing over the last few years. Valli Arunachalam, daughter of the late MV Murugappan, who was Murugappa Group's executive chairman till his death in 2017, has been forced into waging a legal battle with her family patriarchs over the issue of a board seat. A doctorate in nuclear physics and positions in the US as technology consultant to Fortune 500 corporations along with a 8.21 percent stake in the group’s holding company Ambadi Investments Ltd. (AIL), hasn’t been enough to give her a seat at the family leadership table.
The family’s stand on the issue represents a bygone era of Indian business. It needs to be junked in pursuit of a more diversified workforce, which is the only way forward for enterprises as they grapple with the demands of a new stage of growth.
Sundeep Khanna is a senior journalist.
Views are personal, and do not represent the stand of this publication.
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