Gender Diversity on Corporate Boards: A Cost-Benefit Analysis

Over the past few years, attention has significantly shifted to the influence that gender diversity has on the efficiency of corporate governance and how it is imperative to boost productivity and social compliance, thereby increasing firm value. Despite such increase in the need of a gender diverse board, a number of Asian countries including India, fall below the average indicator for female representation on boards. The reason for such underrepresentation is manifold for India. There is an increased need to look at the social and economic factors that impact gender bias and stereotypes and hence leads to a predetermined notion of gender-based work roles. The uprise in the number of female board members in Indian corporates was visible after the implementation of a legislation mandating a quota for such representation. But it subsequently became stagnant, making the regulatory mechanism inadequate to cater to the need of a gender diverse board. Also, compulsorily pushing companies through legislation may not have helped us reach the goal. This article analyses the important role regulators, institutional environment, companies and investors together play in diversifying the corporate boards. The article also analyses the need for a more inclusive structure, which will include social, cultural and economic factors in determining an equal representation of women on corporate boards.