‘Research across the world finds that organisations also greatly benefit from women in leadership roles’
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Once again, the world will celebrate International Women’s Day on March 8, 2025 and companies will attempt to showcase steps taken toward the inclusion and the increase of women in the workforce. Yet, the lived reality of women in or trying to enter the corporate workforce is starkly different.
The recent instance of rolling back diversity, equity and inclusion (DEI) programmes in the United States federal government, which also encourages the private sector to end DEI preference hirings, highlights the challenges and the barriers to increasing women’s participation in the workforce. Women, who comprise 48% of corporate America’s workforce, are reeling from the aftershock of this order and are now facing the threat of identity erasure.
A ripple effect
It may be easy to brush aside this order as an issue that plagues only the United States. However, the effects of a dip in DEI hirings and women’s exclusion can have severe repercussions in all parts of today’s globally connected world. Regardless of where one is situated globally, conversations relating to the participation of women in the corporate workforce are significant.
While DEI may simply be a corporate mechanism to make small inroads into women’s participation in the workforce, especially at an entry level, at present, even such an entry mechanism has not really increased women’s participation in leadership roles. For instance, in India, women have been historically marginalised from the workforce and comprise about 35.9% of the worker population ratio; the number is starker at the senior and middle management levels where women account for only 12.7% leadership roles as of 2024.
It is easy to brush aside DEI as being a fabricated gesture of tokenism, where women placed in companies are viewed as sufferance or an obligation rather than finding a way at the table on their own merit. Of course, while DEI may help women make an in-road into leadership roles in companies and have a semblance of a level playing field, their performance and ability to consolidate their position will depend on their own performance and further normalise the presence of women at all levels of the workforce.
The effect of legal mandates
Over the past decade, Indian legal mandates can be credited to help increase the presence of women in the corporate workforce especially at the senior level. In 2014, the Companies Act, 2013 mandated that at-least one-woman director should be placed on the board of certain class of public limited companies, and in 2015, the Securities and Exchange Board of India (SEBI) mandated that at least one independent woman director be appointed to the board of India’s top 1000 listed companies. Thus, it is largely due to a legal mandate that companies are attempting to uphold best practices of gender diversity The inclusion of women directors on the board of NSE 500 listed companies has increased more than threefold, from 5 % in 2011 to 18% in 2023.
Research across the world finds that organisations also greatly benefit from women in leadership roles. At a fundamental level, the presence of women increases the depth of the talent pool available in the workforce. Women provide informational diversity gained from different educational and career trajectories and distinct social and professional network associations and offer a participative, democratic leadership style that stimulates robust discussion, drives a richer challenge and delivers greater value. Additionally, women tend to focus on relationship building, foster greater stakeholder commitment and assist in formulating strategies that address stakeholder concerns while also overseeing better monitoring, broader human capital management, and communication channels which increase corporate accountability and reduce corporate risks.
When companies have more women in senior management and leadership roles, they begin to appear on lists of the most admired and ethical companies, best companies to work for, and best corporate citizens, thereby also serving the agenda of companies from an optics perspective and feeding into a virtuous cycle of benefits.
Key identified areas where women leaders bring greater dividends are corporate governance, strategic proposition oversight, risk management, shareholder and stakeholder value, gender and society, and environmental responsibility, all of which are important facets of running an efficient and clean corporate ship which contributes to economic parity.
What real change is
While token participation of women in companies may be a way out for some companies to demonstrate commitment towards gender diversity in the workplace, women are truly effective corporate leaders when they are given actual power and responsibility and not merely appointed to positions as a token for gender diversity or to serve the agenda of their male benefactors. It is only when a greater number of C-Suite/KMPs (top-level executives in an organisation and Key Managerial Personnel, or KMPs) are women, and, in addition, more independent directors and chairpersons of committees of the board and board committees are women, that they are truly effective corporate leaders. Importantly, the remuneration of women that is at parity with their male counterparts is a key indicator that women’s presence in the corporate workforce is real and robust.
While we do have a lot to celebrate on the occasion of Women’s Day this year, it is important to keep in mind that there are still significant steps that companies and regulators must take in order to ensure that women’s participation in the corporate workforce, especially in senior leadership roles, is strong, contributes meaningfully toward corporate governance and is not just a token concept that is aimed at gaining brownie points from stakeholders. Women’s participation in the workforce must be promoted for its many benefits and must not fall victim to the dominant political narrative.
End note: The issue of women in the corporate workforce, especially on company boards, is of great significance and merits deep research into various facets. Thought Arbitrage is undertaking such a study which maps the patterns of women on corporate boards by using qualitative and quantitative research methodologies over a 10-year period, involving about 1,000 companies.
Prachi Dutta is a lawyer qualified to practise law in New York and India. She handles Thought Arbitrage Consulting’s advisory practice
Published – March 07, 2025 12:16 am IST