REFLECTIVE NOTES

Title: Impact of Gender Diversity in Company Board on Firm Performance of

Small-Cap Companies in India

Good corporate governance and ethics is inevitable for the augmenting the firm value of a
company and maximizing stockholder’s wealth. Corporate governance includes the
director and monitoring of the company through its board. Gender diversity has been
highly discussed in last decade, not only in India but also in other developed and
developing countries. A number of OECD countries are addressing this issue through
various forms of regulations. Some countries have either mandated or established
voluntary women director quotas for corporate boards. On the recommendations of JJ
Irani Committee, the mandatory provision for women director on board was inserted in
section 149 Companies Act, 2013 in India. Nevertheless, the manner in which many
corporates have gone to implement this mandate at the last minute which inculcates
family members on board so that compliance of letter can be achieved not in the true
sense is making a mockery of this directive. Their reflex action has completely
undermined the potential and value that competent women can bring to the board. Some
of the Companies have given the specious argument that there is not enough talent
available in India in terms of decision-making capacity whereas multiple reports evident
that woman in India can bring positive gender diversity on board.
The material fact that India has a huge pool of talented women professionals waiting to
be identified and given an opportunity to bring ideas and decision-making ability to the
boardroom. The undeniable body of evidence in favour of women’s empowerment
presents a concrete case for building more gender-diverse corporate leadership.
Corporations and governments must capitalize on the contributions women can make. It’s
a formidable task and one at which many have failed in the past. Ensuring gender balance
in the board does not mean we compromise the quality of the board but we try to create
diversity on board. The selection of women directors based on their professional
capabilities will enhance the quality of the boards leading to much better outcomes which
are evident by most of the national and international research outcome.
At the same time, it’s equally important to address the gender diversity issue at the
organization level in terms of small-cap companies for a better outcome. For inclusive
development, it is imperative to embed gender diversity into the organization’s culture
enhance diversified of an idea to put forward in order to make good organizational
outcome It impact competitiveness given the extensive evidence that indicates
companies with more women on their board outperform companies with fewer or no
women directors. In addition, a report from Catalyst, a research group focused on
women’s advancement to senior leadership, found that Fortune 500 companies with more
women directors, on average, outperformed those with fewer women board members on a
broad range of financial indicators. At the end, researchers after doing literature review
make out the conclusion that on board creates diversity and decision-making ability to
take up the growth of the company.
The researcher does not have any evidence as to the fact that higher gender diversity on
the board directly affects firm’s value. However, we find indirect effects which will be
tested through the empirical study of Small cap companies listed in Bombay Stock
Exchange. However, the accounting of statistical analysis could not reflect the ethical or
steering involvement of women on board.