Companies Failing to get Women on Board Face Sebi Action

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IndiaCSR News Network

NEW DELHI : Under regulatory pressure, over 100 listed companies on Wednesday announced appointment of women directors, even as many others including some state-run giants were seen lagging behind in having at least one female member on their boards.

According to the Sebi directive and the Companies Act, 2013, all listed firms were required to have at least one woman director on their boards by March 31, 2015. The companies have been warned of “serious consequences” including hefty penalties for non-compliance. Sources said Sebi has sought a compliance status report from the stock exchanges (SEs) and would take a call accordingly. Interestingly, most of the companies on Wednesday said that the appointments were effective Tuesday, or even prior dates.

Those lagging behind in appointing women directors included Jet Airways and Amrapali Industries, as also a number of state-run firms such as ONGC, PNB and BPCL, NHPC, SJVNL and RCF, as per the latest update available with the exchanges. At least 50 companies announced the appointments late in the evening.

Discrepancies have already begun to show in the appointments, as some companies have appointed persons without DIN (Director Identification Number) as directors, while a few others have not submitted board approval for the appointments. Besides, a few companies have already started writing to the stock exchanges and Sebi about change in the name, saying that there were some mistakes in their earlier regulatory filing about the appointment. This has given rise to suspicion that the companies could have just done a “tick-box” job with the appointment in giving names of the women directors, without actually having brought them on board as yet.

Sebi had first issued the guidelines in February 2014, seeking compliance before October 1 that year, but later extended the deadline by six months. According to leading proxy advisory firm, Institutional Investor Advisory Services India (IiAS), having a woman director on board is just the first step towards board diversity.

The companies without a woman director may face penal action under the Sebi regulations, as also under the Companies Act, including monetary fines. While Sebi norms provide for penalty of up to Rs 25 crore, the penalty under the Companies Act can be from Rs 5,000 to Rs 5 lakh.

Sebi will look into the final compliance status and begin the process for undertaking necessary action against the non-compliant companies. Similar action would be initiated by the corporate affairs ministry for non-compliance to the companies act provisions. agencies

All listed cos were required to have at least one woman director on their boards by March 31, 2015.

 

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