A total of 2,015 out of 5,305 companies listed on the Bombay Stock Exchange (BSE) and 263 out of 1,624 listed on the National Stock Exchange (NSE), as well as some public sector firms and nationalised banks are yet to appoint women directors.
According to guidelines issued by market regulator, Securities and Exchange Board of India (SEBI), companies were required to appoint at least one woman director on their boards by October 1, 2014, which was later relaxed to April 1, 2015.
“It is in companies’ interest to diversify so that their functioning can improve. There are a large number of companies that are yet to comply,” Minister of State for Finance Jayant Sinha said in reply to a question by Congress leader Ashok Chavan in the Lok Sabha on Friday.
When asked about how long public sector firms will take to comply, Sinha said, “this is a methodical process and we need to ensure that capable people are on the board. We are going through that vetting process.”
On private firms, Sinha said since it is a market-driven economy, it is up to them to comply. “We can only guide and frame rules. After that it is up to the companies to implement.”
He said non-compliant firms will have to pay penalty and can escape further regulatory action if they comply within September 30. The listed companies complying between April 1 and June 30 will have to pay only Rs 50,000. Those complying between July 1 and September 30 will need to pay Rs 50,000 and an additional Rs 1,000 a day till compliance. The listed companies complying on or after October 1, 2015 will have to pay Rs 1.42 lakh, plus Rs 5,000 a day till the date of compliance.
The Minister said the penalties will send a strong message that this is a matter of public policy and has to be complied with, and hoped that “good sense” prevails on corporates.