Authors: Aditi Jha and Aparajita Bharti

Published: 7th August 2024 in Hindustan Times

A decade ago, the Companies Act of 2013 and SEBI’s 2014 rules sparked hope for significant shifts in corporate leadership demographics. The Companies Act of 2013 requied certain classes of companies to have at least one woman director on their boards, while SEBI’s 2014 rules limited independent directors’ tenures to two consecutive terms i.e. 10 years. These measures aimed to enhance gender diversity and leadership within corporate boards. As a result, over the years, women’s representation on boards has increased from 6% in 2013 to 18.3% in 2023.

The progress has been incremental but also slow and uneven. As per a report by Fortune India and SP Jain Institute of Management and Research, only 20% of Fortune 500 companies in India met the requirement of having at least one woman director as of 2023. With approximately 30,000 independent directors set to complete their 10-year term in 2024, it remains to be seen how companies refresh their boards this year. At this critical juncture, companies have the opportunity to walk the talk on diversity and gender inclusion. But at the same time, we must also remember that the Board is not where womens’ leadership journeys begin.

The leaky pipeline continues to hamper women representation

LinkedIn’s Economic Graph data reveals that globally women comprise 42% of the workforce. However, they only hold 31.7% of senior leadership positions. Further, the hiring of women in leadership roles has declined since 2021 globally, dropping from 37.5% to 36.4% by early 2024. In India, in contrast, there has been an increase in female representation in senior leadership roles albeit on a much lower base. It has risen from 16.6% in 2016 to 18.7% in 2023, slightly dipping to 18.5% by May 2024. Female leadership hires increased from 18.8% in 2016 to 25.2% in 2021, then declined to 23.4% by May 2024.

The concept of a “leaky pipeline” aptly describes the career trajectory of women in the workforce. While women show strong representation at entry and senior individual contributor levels, there is a notable decline as they move into managerial roles. Starting at 29% at the entry level, female representation drops significantly at the managerial level and continues to decrease through the director and vice president levels, ultimately reaching just 15.3% at the C-suite level. This decline often coincides with life stages where women face increased pressures from marriage and caregiving responsibilities, leading to higher attrition rates.

Uneven progress in women representation across sectors

Sector-specific trends further highlight the challenges and opportunities. Globally, women make up only 28.2% of the workforce in STEM fields, in stark contrast to 47.3% in non-STEM sectors. Yet, emerging technology sectors show promise, with the number of women in AI engineering having more than doubled since 2016.

In India, the landscape is varied: Financial Services and Technology sectors see around 19% female representation in senior roles, whereas Education and Government Administration boast higher figures at 30% and 28.7% respectively. Other fields like Consumer Services, Professional Services, Hospitals, and Health Care also show moderate female leadership representation, indicating pockets of progress amidst broader challenges.

Conversely, Construction, Oil & Gas, Mining, and Utilities traditionally perceived as a “male domain” have female representation below 10% in senior roles. These insights reveal that certain sectors require more concerted interventions to make them gender inclusive. Occupational segregation disproportionately impacts Indian working women, and limits their career growth opportunities. For instance, industries such as Construction, Manufacturing, and Oil, Gas, and Mining face entrenched gender stereotypes, a lack of female role models, and work environments that discourage female participation.

So, how can we bring change and make the workforce more inclusive for women?

LinkedIn’s Economic Graph findings also reveal that while it is crucial to drive compliance of existing mandates, it is  also important to go beyond them to prepare women to take leadership roles in their careers. Implementing supportive workplace practices like flexible hours, remote work where possible, and childcare support can aid in retaining more women in the workforce. Women returning to work after maternity leave need special support and flexibility so that they can continue their career trajectories. Further, while evidence suggests that women in leadership can foster more gender-responsive organisations, it’s essential to recognize that women taking up these roles require additional support to bring about these changes. Mentorship support is required for women at all stages of their careers as they have fewer role models.

On a broader level, we need more nudges for organisations to be intentional in fostering women leaders. Establishing a National Dashboard on Women’s Leadership in the private sector can aid in tracking progress, showcasing successful initiatives, and disseminating best practices across industries. We also need increased investment in care infrastructure and policy action towards paternal leaves to redistribute women’s workload at home.

With “Women-led development” firmly on the government’s agenda, women’s representation and leadership in the private sector is an important piece of the puzzle. Women in leadership in each industry open up new opportunities for the next generation. Sectoral gender disaggregated data on job roles can help us identify crucial roadblocks, so that we can remove them one by one.

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Aditi Jha is the Country Head, Legal & Government Affairs and board member at Linkedin India. Aparajita Bharti is the Founding Partner of The Quantum Hub (TQH) Consulting, a public policy firm.