Women Director

A woman director is a female member of a company's board appointed to meet the gender-diversity mandate under the Companies Act, 2013. The proviso to Section 149(1), read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014, requires every listed company, and every other public company with paid-up share capital of Rs 100 crore or more or turnover of Rs 300 crore or more, to have at least one woman on its board.

Who must appoint one

• All listed companies (equity listed on a recognised stock exchange).
• Public companies crossing either the Rs 100 crore paid-up capital threshold or the Rs 300 crore turnover threshold, measured on the last audited accounts.

A newly incorporated company covered by these limits must appoint a woman director within six months of incorporation. A company that later crosses the thresholds gets six months from that date to comply.

Filling a vacancy

An intermittent vacancy in the position of woman director must be filled by the board at the earliest, but no later than the next board meeting or three months from the date of the vacancy, whichever is later.

Listed companies: SEBI overlay

Regulation 17(1)(a) of the SEBI (LODR) Regulations, 2015 independently requires every listed entity to have at least one woman director. Since 1 April 2020, the top 1000 listed entities by market capitalisation must have at least one woman independent director (the top 500 have been subject to this since 1 April 2019).

Consequences of non-compliance

Failure to appoint or maintain a woman director attracts penalty under Section 172 of the Companies Act, 2013, exposing the company and every officer in default to monetary fines.