Why should your next board member be a female? If you are a company seeking to find the best ways to please the largest consumer group of all, it would be in your best interest to begin hearing the voices of the female population. Women are responsible for more than 75 percent of all buying decisions. By bringing women to the decision-making table, companies can and will excel and we can all take away something from women in business. Studies have shown that having a woman in the boardroom brings in diversity and enhances the quality. They also show a relationship between diverse boards with women members and positive impact on the return on equity of the company. Fortune 500 companies with the highest representation of women board directors attained significantly higher financial performance, on average, than those with the lowest representation of women board directors, according to a recent study.

However, availability of talent pool is the biggest challenge in the Indian market. Typically for board level positions, organizations look at candidates with a general management experience and who have an understanding of P&L. Historically, India has had a low female participation rate not only in corporate boards, but also in its labor force. The real issue is that companies have restricted their search to a small group within the corporate world instead of broadening it to eligible candidates from other sectors. For example, in developed markets such as the US and the UK, the trend of appointing professors and academicians on boards is quite common. Many women in India tend to take up jobs related to education. Other sectors that are heavily dominated by women these days are the social sector (like with NGOs) and journalism. So far, Indian companies have not looked at these sectors seriously for a board member candidate. While companies have the right intent, they haven’t widened the pool to look at non-traditional sources. In some cases the problem is also sector-specific. For example, the auto sector and heavy engineering are heavily male-dominated, so finding women in senior management positions is difficult. On the other hand, retail and consumer goods industries are more accepting. The No. 1 company in the world with the most female directors is Avon, where seven of the 11 directors are female.

Taking the matter in its hands, the Security and Exchange Board of India (SEBI) issued guidelines in February 2014 that every listed company or every other public company having a paid up capital of Rs 100 crore or more or a turnover of Rs 300 crore or more should have a woman on its board before October 1 that year, but later extended the deadline by six months.

SEBI itself, however, was an exclusive male club with no woman members. Clarifying to earlier allegations that it does not have a woman member on its board, it said “Secretary, Ministry of Corporate Affairs, Ms Anjuli Chib Duggal is a member of the SEBI Board.” Interestingly, the Government itself has been lazy about compliance. Data shows that 32 of the 180 NSE companies that haven’t complied are PSUs, where the Government is responsible for appointing directors.

The penalties levied by SEBI on those listed companies that did not comply with the regulation were about bringing down the promoter holding to 25%. While SEBI norms provide for penalties of up to Rs 25 crore, the penalty under the Companies Act can be from Rs 5,000 to Rs 5 lakh. Nearly 500 companies announced such appointments in the last two days of the financial year ending 2015, while over 100 firms made such announcements on April 1.

Among women directors, Renu Sud Karnad and Ramni Nirula have the maximum number of board positions at seven. Only 33 companies have a woman chairperson/co-chairperson, of which only one is an independent director. The companies with the highest number of women directors are Apollo Hospitals Enterprise, Indraprastha Medical Corporation and Monte Carlo Fashions at four each.

A few companies have already written to the 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 the names of the women directors, without actually having brought them on board as yet. The companies have, however, mostly appointed wives or daughters of their promoters or top executives, while some have also replaced their independent directors with their female family members, mainly wives, daughters or sisters. Such companies include top corporate brands such as Reliance Industries, Raymond, McNally Bharat Engineering, TVS Motor, Videocon Industries, JK Tyres, Mangalore Chemicals and Asian Paints. In some cases, the Director Identification Number (DIN) has been found to be missing for the appointed women directors, while there are also instances of due process not being followed in calling a board meeting for such appointments.

Today corporate India doesn’t need more than 2,000 women to comply with the law, but companies need to be as fair and broadminded in appointing women directors as they are in appointing men. While a company advertises for talented risk-takers on one hand, the board is actually risk-averse and steeped in convention when it comes to allowing women to join their ranks.

In the current scenario in India, appointed women directors from promoter’s families shall have the same voice as the promoter, defeating the very purpose of the directive of creating genuine (independent) gender diversity. The only hope is that these women too could bring a different perspective to the board, even if it is not entirely independent. Women’s groups have long complained about the paucity of women in the top ranks of corporate. In making their case, they typically point to the injustice of discrimination, glass ceilings and old-boy networks. But today as they are being joined by business and financial groups who emphasize profit, we shall soon see how these directives are able to revolutionize and bring in a genuine change in mindset and need of having more and more women’s directors on company boards.