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Operations & Management

Emerging Need Women Director (Section 149(1)) of Companies Act,2013

Contents hide

1 Abstract

2 INTRODUCTION

3 [2]WHY DO WE NEED WOMAN DIRECTOR

4 QUALIFICATION OF WOMEN DIRECTORS

5 PROCESS OF APPOINTMENT OF WOMEN DIRECTOR

6 DURATION OF WOMAN DIRECTORS

7 REMUNERATION OF WOMAN DIRECTORS

8 CONCLUSION

9 Reference

9.1 Related

Abstract

Ranging from Mrs, Patil (former president of India) to Mrs. Mary Kom(sportsperson) and Mrs. Nita Ambani (Businesswomen) to R. Bhanumati ( judge, Supreme court of India) India have witnessed a diversified role of Women in almost every field. With this in 2014 section 149(1) companies Act, 2013 read with rule 3 of companies (Appointment and Qualification of Director) rules 2014 have mandated the companies for the appointment of at least 1 women director in its board. Therefore in this paper, I tried to explain the role of women directors in this leading competitive world.

INTRODUCTION

According to sec 2(13) of companies act, 2013 director includes any person occupying the position of director, by whatever name called. According to section 149, there should be a minimum of two directors in a private company and a minimum of 3 directors in a public company. Sec 149(1) of Companies act, 2013 read with rule 3 of prescribes that following class or classes of companies shall appoint at least one woman director\

Every listed company
Every other public company, having
Paid up capital of 100 cr. Or more or
Turnover of 300 cr. Or more

Shall have at least one woman Director within a period of one year from the enforcement of this ac

If any vacancy arises in the office of women director, such vacancy shall be filled up earliest but not later than the following dates

a 3 months from the date of vacancy

b at the 1^st board meeting held after the vacancy in addition to this.

SEBI vide recent notification provides that board of directors of top 500 listed entities shall have one independent women director by April 1, 2019 and the top 1000 listed entities shall have at least one independent women director by April 1,2020 which shall be determined on the basis of their market capitalisation.

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[2]WHY DO WE NEED WOMAN DIRECTOR

With the advancement of technologies in the 21^st era, many scams have arisen in the corporate industry which ultimately gives the pathway to introduction of women director in corporate governance.

Having women director can help in many ways such as:-

Better financial results in terms of returns on scale(ROS) & return on investments (ROI)
Corporate and ethical governance by reducing the amount of overall risks concerned
Promotion and encouragement of women at workplace
Maximisation of profits of the company
Optimum utilisation of resources of the company.

Article 16 of Indian constitution states all citizens should have equal opportunities for citizens in matters relating to appointment and employment to any office under the state and no discrimination should be made on basis of caste, creed, sex, descent or place of birth or any one of them. The Article 39(a) men and women should equally have adequate means of livelihood. Article 39(d) provides secure equal pay for equal work for both men and women.

QUALIFICATION OF WOMEN DIRECTORS

For a women to become a director of the company she shall not be disqualified as mentioned under section 164 of the companies Act, 2013 read with rule 14

(a) If she is declared unsound mind by the court

(b) If she is declared undischarged insolvent or has applied for insolvency

(c) If she has been convicted for 6 months under an offence involving moral turpitude and 5 years has not been elapsed from date of expiry of period. if he has convicted for 7 years he will never be eligible for being appointed as a director

(d)Non-payment of call at least 6 months from the last due date

(e) If she has been convicted under section 188

(f) If she has not allotted DIN

1(i). If a director does not comply with number of directorships i.e. maximum 10 in public company and maximum 20 in private company he shall be disqualified under section 164 of companies act (as per companies amendment ordinance.2019)

2 If a public company fails to file its annual accounts or annual returns for continuous 3 financial years or fails to pay dividends, debentures. Deposits or Interests on deposits and if such failures continues for 1 year in such a case all the directors of that company will become ineligible to be appointed as an director for 5 years.

PROCESS OF APPOINTMENT OF WOMEN DIRECTOR

For appointing a woman director following steps is to be followed

Apply for DSC to MCA
Once DSC has been allott apply for DIN in form DIR 3 follow with DIR 4
Once the people have been allott DIN conduct an EGM or AGM as decided by shareholders and pass a special resolution in meeting for appointment of director.
File the special resolution with ROC in form MGT14
Obtain the consent of director who is to be appoint as an director in form DIR2
Record a declaration of director in DIR8 with ROC
Once the appointment letter is issue to director it has to be file in DIR12 with ROC
The company can make necessary entries in register of directors and Managerial personal as required

Thereby you will have a new company director name on the MCA website.

DURATION OF WOMAN DIRECTORS

A woman director holds the office of directorship until the next AGM for which she is appoint for. However she can be reappoint by passing a special resolution in the next AGM. Similar to other directors a woman director is also liable for retirement by rotation as mention under section 152(6) of companies act, 2013. A women director can also give resignation under section 168 or can be remove from her office as mentioned in section 169 of companies act, 2013.

REMUNERATION OF WOMAN DIRECTORS

Industries have witnessed a huge gap between male directors to female directors , while the salaries of male directors on a average is 36 lakhs per annum salary of female directors have hardly increased from 27lakhs per annum in 2016 -2017 by36lakhs per annum in 2018 , This has clearly shown a gap of Rs.5 lakhs in both their salaries. According to prime database of Nifty 100 the gap between average salary of men and women is approximately 1.2 crores. The pay gap arises not because men and

women are pay differently for the same work but because the labour market incentivises them to work differently.

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CONCLUSION

Emerging Need Women Director (Section 149(1)) of Companies Act,2013

Ministry of corporate affairs with an objective of woman empowerment in corporate sectors have implemented the concept of women director under section 149(1) read with rule 3 of companies (Appointment and qualification of Director) rules 2014. SEBI wide notification of SEBI LODR Regulation,2016 have issued guidelines regarding this .A research was done on fortune 500ncompanies and it was found that and it was found that almost all the companies have a women director on the board and that is the reason the concept of women director is introduced in this act. Although large corporates have realised the value of woman on board and have made progression towards this sectors

but a lot is still to achieved in the coming years especially in the change of mentality of people towards woman director.