Who Cares Why, here Our Chance!

I write this as a war veteran of over a 100 years of cumulative tenure as a board director, spanning a wide swathe of company types, and mostly the lone woman on the board (except for three very gratifying boards, two of which had professional women as MDs and one as a chairperson).

With the new Companies Act requiring at least one woman on every Indian board, there will be many more treading the same path, so I thought an honest summary of what I learnt in my board century might help.

1. Don't feel bad that regulation and not the merits of the case is forcing affirmative action in favour of women; even liberalisation in 1991 was not voluntary. Indira Gandhi was called goongi gudiya in 1966, and Angela Merkel's climb was hastened by her being a woman and an East German. So, ignore what they scripted your role to be and do what you must. I have been invited on boards with the expectation that I would confine myself to providing marketing advice, not challenge acquisition logic or question financial disclosure norms. But I soon learnt that in law and in governance literature, there's no category called "limited jurisdiction board member".

2. There are very specific, solid reasons, beyond the usual platitudes, on why diversity is so important to boards. The director's job description requires judgement calls that leverage not just business knowledge and experience but also personal value systems on ethics, social responsibility, equity and fairness to all stakeholders.

How much should contract labour doing the same jobs as permanent labour be paid, given the India context? Where should one draw the line between being legally correct and morally right on stock- sensitive disclosures? How much should the spectacular short-term results with no visible strategy validation and likely long-term value erosion get rewarded? Does a superbly performing management get a discount on the standard of governance expected to be maintained, and will this answer be different based on the quantum of shareholding of the management?

To bring balance and rigour to such decisions, diversity of backgrounds, experiences, mind wiring, ethical orientation, life experiences, and definitions of success are essential. Gender diversity checks many of these boxes.

3. Even the best Indian boards are notoriously clubby with members having intertwined business interests. They prefer to minimise dissent and an unhappily large number of sins of omission occur.

The new law will make boards less clubby. Early data show that while half of the first-time women directors appointed have added to board clubbiness (related to promoters or non-independent), the other half have been sourced from outside the club, with nomination committees being forced to work harder than their usual perfunctory "who should we pick out of those we know and rate well".

4. Finally, since women will still be a tiny minority on boards, they will be tempted to want the comfort of belonging to the majority group, and be pressured to "fit in" and not be "controversial" (that is, not express independent opinion). But in doing so is an opportunity lost to change things for the better, a learning curve that is stunted, a dharma undischarged. The trick is to focus on performing and not on belonging. A relentless focus on doing what you think is correct, brings effortless belonging based on contribution that is hard for board colleagues to ignore.

The author is an independent market strategy consultant.