Cos sans women on board may face graded penalties

1. Cos sans women on board
may face graded penalties

2. Contd..
The Securities and Exchange Board of India (SEBI) is expected to
announce graded penalties for listed companies that fail to appoint
women directors on their boards. But, with public sector companies
and banks being on the defaulters' list, the market regulator is unlikely
to crack the whip hard.
In any case, the failure of companies to comply with the new code is
not just a non-compliance with SEBI's norms but also a violation of the
Companies Act, which first prescribed the rule. On its part, the market
regulator had brought its guidelines on line with the Companies Act
that governs unlisted entities as well.

3. Contd..
Since the Companies Act allows up to one month for companies to
report change in directorship, the ministry of corporate affairs will wait
at least till early next month before deciding the future course of
action, said sources. SEBI may , however, announce its measures as
early as this week with those companies that comply with the one-
woman director norm earlier facing lower penalty . The Companies Act
also had a deadline till March 31 to comply with the women director
rule.
“Sebi can't be seen to be allowing violation of its diktat but is finding it
tough to initiate strict action given that public sector banks and
companies have violated the norms in large numbers,“ said a source.

4. Contd..
Experts, however, warned that stiff penalties may not be the best way to
deal with the situation. “It is a technical as well as social change. The idea is
to get good people on the board, not necessarily the promoter's wife. So, it
needs education, persuasion and coercion in right doses,“ said D K Mittal,
who had redrafted the Companies Act during his stint as corporate affairs
secretary . Mittal suggested that the regulators should extend the
compliance deadline by three months or so.
Prithvi Haldea of PRIME Database said, “The regulator should first impose a
monetary penalty and give three months to companies to comply with its
guidelines. If companies still don't comply , then the penalty should be
harsher. Simultaneously, Sebi should work with the government to ensure
that PSUs are compliant.“

5. Contd..
As many as 12% or 180 of 1,456 companies listed on the National Stock
exchange have failed to appoint a woman director on their boards
within the stipulated March 31 deadline. Since April 2014, 1,832
women directors have been appointed on the boards of 872
companies. Of these companies, only 43 had women directors prior to
the SEBI rule.

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