Tuesday, 19 May 2015

New Indian Companies Act Of 2013, Towards Women Empowerment

India: Woman Directorship - A Laudable Initiative Of The New Indian Companies Act Of 2013, Towards Women Empowerment

Last Updated: 15 May 2014
Article by Hemant Goyal and Sandhya Aggarwal
One of the highly significant things and provisions introduced by the new Companies Act, 2013 of India, is mandatory inclusion of at least one woman director to the Board of every prescribed class of companies in India. This provision can be considered as being a highly elegant and revolutionary initiation by the Government of India, for the purposes of empowerment of women in the Indian corporate world, thereby strengthening and promoting contributions of women to the economic progress of the country.
Here, it may be mentioned that women have always supported men and the society, for achieving well-rounded development and progress, in every vital and most significant sphere of the domestic and social life. Again, in the occupational and professional domains, women have an ever-increasing participation in almost all fields of the broad economic sectors of business and commerce, professions, industries, and services, at the levels varying from lower to higher hierarchies. In some well-developed countries, where there are liberated outlooks and opulent facilities for quality higher education and disciplinary training, women have been emulating men, even in the fields of army and defense, aviation, and space exploration. Thus, women in general, certainly have great and admirable credit for contributing remarkably to the domestic progress and prosperity, social development, and economic progress and growth, in most of the fast progressive countries of the world, essentially including India. As India is one of the major and fast growing economies of the world, this initiative for empowerment of women in the giant and pivotal corporate world, is indeed, highly commendable. Thus, facilitating the lawful entry of woman to the Board of Directors of prescribed class of companies is surely a bright and prudent decision for enhancement of the cherished contributions of women in the economic progress and growth of the country.
The Board of Directors of a company is the vital governing body and directors are ultimately responsible for stable, highly efficient, and profitable running of the concerned company, safeguarding the interests & progress of the company and its stakeholders. This entry to the Board of Directors is now well-facilitated and secured through second proviso of sub-section 1 of Section 149 of the new Indian Companies Act 2013. Through promulgation of this innovative provision, the constantly changing and dynamic Indian corporate world is now intelligently enabled to widen its talent pool with inclusion of imaginative persons with diversified backgrounds and viewpoints.
As per the new Companies Rules of 2014, the following categories of companies are mandatorily compelled to appoint at least one woman director to their respective board of directors:
  1. Every listed Company
  2. Every Other Public Limited Company which has
  1. Paid-up Share Capital of One Hundred Crore Rupees or more; Or
  2. Turnover of Three Hundred Crore Rupees or more
A Company, which has been incorporated under this Act and is covered under provisions of second proviso to sub-section (1) of Section 149, shall comply with this provision of women directorship, within a period of six months, from the date of its incorporation. And any intermittent vacancy of a woman director shall be punctually filled-up by the concerned Board at the earliest, but not later than the immediate next Board Meeting or a period of three months from the date of such a vacancy, whichever is later.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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