'Don't do tokenism': Sebi chief lists two metrics to gauge meaningful women representation in boards

At a time when the debate around women representation in the boardrooms and workforce, in general, is getting louder, the capital markets regulator has reiterated that tokenism won't count and there is a need for proper representation of women across all levels.

None other than the chairperson of the Securities and Exchange Board of India (Sebi) Madhabi Puri Buch has clarified that the commitment of companies can be evaluated and that the watchdog has identified two key metrics to measure the commitment level.

"We have identified two metrics," said Buch, while speaking at the Business Today Most Powerful Women function on Friday.

"One is what is the percentage of your payroll costs that goes to women. Don't do tokenism by putting more women on the board. Let's see the disclosure on what percentage of your manpower cost goes to women. It will take care of everything. And the second metric is POSH complaints. Simply parachuting someone at the top and doing nothing at the bottom, I don't think that is going to work for our country," added Buch.

This assumes significance as studies have shown that while companies have been compliant with the regulatory requirement of appointing at least one independent woman director at the board, it is mostly looked upon as a checkbox exercise rather than complying with the law in spirit.

As per primeinfobase’s analysis of Nifty 500 companies, the absolute number of women directors in India has more than doubled since 2015, after the Sebi guidelines became effective. But a closer look reveals that the country is still some distance away from going beyond checking the boxes.

An EY report of 2022 shows that about 60 per cent of the Nifty 500 companies have just one woman board member, while less than 5 per cent of the companies have women as chairpersons. 

Further, only nine of the Nifty 500 companies have 50 per cent women’s representation, per primeinfobase.

Interestingly, in India, 605 women hold the 803 board positions in Nifty 500 firms, per the 2022 EY report.

Also Read: BT MPW 2023 LIVE updates: 'Gender was never a thing for me,' says Madhabi Puri Buch on being first woman chairperson of SEBI