Spotlight on India

Looking at boardrooms with at least one female director, there has been outstanding growth over the past decade as the graphic above shows—the share jumped from 66.7 percent in 2012 to 97.4 percent in 2022.

Now, when we look at all board seats in India, 18.7 percent of them are held by women—up from 17 percent in 2020. The nation performs better than the Asian average (14.8%), but still ranks behind the global average (27%). Analyzing change over time, the share of female board seats has growth just a little over 1 percent. While it may not seem much, this growth rate positions India as the sixth fast-changing country among all 10 Asian countries in this study.

While the rules were first introduced nearly a decade ago, they sparked concerns around timing to find a qualified candidate, given that the pool of female leaders is, unfortunately, narrower if we consider the traditional parameters boards use to recruit, such as executives with CEO, CFO or COO experience. However, Chair of Mahindra Group Anand Mahindra believes that many companies should rethink what the parameters of qualification to serve on a board really mean. “If you look around, there was always somebody you could get if you broadened your horizon into not looking just for a CV, which said, you know, this was the corporate history of that woman. You have to recognize that women in other fields bring tremendous, tremendous value too. And I think that's something we still have to do,” he says.

Another measure of diversity is the share of female board hires. When compared to its Asian peers and the global average, India is ahead: 20.8 percent of new board hires are female in India, against 20.6 percent in Asia and 17.2 percent globally. However, 22.6 percent of female board leaders hold more than one seat, while only 12.8 percent of male board leaders do. This means that more women are serving on multiple boards compared to men, and companies should broaden their lens to hire new female talent as well.

For Vikram Singh Mehta, lead independent director of Mahindra & Mahindra Ltd, tackling the challenges of today require a diversity of views. “This is a truly new world. A world where the unexpected is the expected. You really do need the board as sort of the body that oversees strategy, that oversees management, and in some sense, not management or the management structure and the executive decision making, the quality of executive decision making,” he says. And this is where diversity comes in as a major asset, he adds. “You really do need a board that compels the management to ask to look at issues from every perspective. And that is only possible if the board asks challenging questions, and that is only possible if the chairman allows for that culture to develop, to evolve.”

Anish Shah, CEO of Mahindra Group, shares this sentiment. “There are certain glass ceilings or certain constraints and first, from an organization standpoint, diversity is very important because it's about bringing in diverse ideas. It's about bringing in diverse mindsets,” he says.

When we expand our findings to look at international diversity in Indian boards, we find that companies tend to prefer national leaders. Boards with international board members are very low compared to global numbers standing at 44 percent while the global average is 73 percent. This isn’t necessarily negative as companies that predominantly do business in India may not necessarily benefit from an international director.

Ultimately, diversity is also about empowerment. “You can have diversity. You can tick the box with that. You can get people to dance at the party. That's about inclusion, equity. You can again say it on a paper, but the fact is you have to empower people. If you don't have a culture of empowerment, you won't get any of this to be a success,” says Mahindra.