Essay Example on Gender diversity is regarded as one of the most concerning Problems









Gender diversity is regarded as one of the most concerning problems in the area of governance especially with reference to Women on Board Kang Cheng Gray 2007 This issue was emphasized after the corporate scandals and failing of several major financial institutions across the globe Following this there were questions on the credibility on traditional homogeneous boards which lead to development of various laws in codes in countries like UK and USA It was Higgs recommendation in his report in 2003 there should be more diversity across the board directors which was a broader statement as diversity includes age gender ethnicity disability religion or sexual orientation Out of these Gender diversity was given more emphasis globally and was substantiated by Davis Report in UK which made 10 recommendations to increase women on board and stressed that Government must reserve the right to introduce more prescriptive alternatives if the recommended business led approach does not achieve significant change Gender diversity in boards are emphasised as it will strengthen the boards and internal management As women possess certain skills and techniques which differ from men in relation to control direction and administration 

Davis Report 2009 Norway was one of the first countries to pass a law that required the companies to have at least 40 of the board members to be women later it was followed by different countries Catharine Morten Silvija 2015 But the question here is will the reports recommendations and laws Codes work in the practical scenario As there are reports which states that Recommending women on board is mostly influenced by the government and societal norms Adams Flynn 2005 Further to it there are findings that there are lack of women representation as heads in various committees like Nomination audit and compensation as these are the crux of any corporate board Rhode and Packel 2010 Even if they are successfully implemented in widely held firms how these laws are going to be consented by family owned or controlled firms Family owned and controlled organizations contribute approximately to 60 70 GDP of most of the countries and India is no exception Sealy Susan 2010 We have a lot of academic literature on firms where ownership is separated from control But there is lack of literature on firms which are controlled by family either by vote or share capital and have traditional and customized management approach Family firms have concentrated ownership and control they are nearly a quarter of fortune 500 companies DeMott 2008 The concept of ownership and governance framework is completely different from that of a widely held firms and are challenging in terms of governance DeMott 2008 Family firms have unique modus operandi compared to widely held firms their functioning is mostly influenced by societal norms cultural and religious values Zahra et al 2004 We can see this clearly in Indian scenario where firms are traditionally operated as their financial year is from Diwali to Diwali rather than following an English accounting year and concept of Karta etc Given this a question of interest is whether women directors matter in these firms in ways that are different from that in widely held firms 

Encompassing this question is the larger question of general interest as to whether the governance environment of a firm matters in determining the relationship between gender diversity and firms functioning There have been studies and papers presented on this but still there is lot of lacuna and ambiguity in the literature with regard to family boards of developing nations due to their culture and traditional governance practices especially in countries like India and China Interestingly India in order to be a service industry hub of the world it is striving hard to meet the global standards by transplanting and implementing best industrial governance policies and procedure Inspired from developed nations India has introduced a mandatory provision in Companies Act 2013 section 149 1 where the board shall have at least one women director which became effective from 1 April 2014 Further to this the Securities Exchange board has enforced in regulation 17 of LODR regulations that the composition of board of listed entity should have executive and on executive directors with at least one women director India has joined the wagon of forced gender diversity nations but the question is how the law is going to work with the patriarchy society As reported different strategy skills and governance mechanisms are required for family organisations Anderson and Reeb 2004 The Irony here is Indian government is encouraging Gender diversity and on the other hand it has rejected women reservation bill 2008 Does this imply that the law is just a lip service act to attract foreign investments in order to comply with the internationals standards The research will focus on this area along with how it will work with the internal management of traditionally managed firms The purpose of this research is to find the direct effect of the law on the family based organizations based on the above issues by using data from listed and few unlisted companies

Further to it the type of business sectors which have started implementing the law and the ones which are not The cause and effect perceptions of the law to the stakeholders and the micro macro economic factors associated with the company By going through different academic writings to best of my knowledge no empirical research has been done in this area The objective is to fill in the lacuna and make contributions by understanding the relationship between the law corporates and its stakeholders This study will contribute to the debate on gender diversity on corporate boards and might help to improve the present situation in the developing countries in relation to family owned corporate boards

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