Introduction to Women Directors under Companies Act, 2013
In today’s corporate landscape, promoting diversity and enhancing decision-making processes are paramount goals. The Companies Act, 2013, underscores this by requiring certain companies to appoint at least one woman director on their boards. This move towards gender inclusivity is pivotal in India’s journey towards fostering equitable corporate governance.
Under the Companies Act, 2013, specific criteria dictate which companies must adhere to this mandate. It encompasses listed companies on any stock exchange and those with substantial financial standing—a paid-up capital of Rs. 100 crore or more and a turnover of Rs. 300 crores or more.
Non-compliance with this provision carries significant penalties. Companies failing to appoint women directors may face fines, starting at Rs. 10,000 and escalating with continuous contravention, potentially reaching Rs. 1,000 per day.
The appointment process is straightforward, allowing companies to appoint women directors during registration or post-incorporation. Each director must obtain a unique Director Identification Number (DIN), with the appointed woman director required to file her consent using Form DIR-2 within 30 days of appointment.
Once appointed, women directors assume roles akin to their counterparts on the board. They can serve as Nominee Directors, advocating specific interests, or as Independent Directors, providing unbiased insights. However, there are limitations on the number of directorships they can hold—capped at twenty, with sub-limits for public companies.
In the event of a vacancy, whether due to resignation, removal, or retirement, the board must act swiftly, filling the position within three months. An alternative director may step in for periods exceeding three months to ensure continuity in the company’s operations.
In summary, the Companies Act, 2013, underscores India’s commitment to fostering gender diversity and representation at decision-making levels within its corporate ecosystem.
