When SEBI asked the listed companies to appoint at least one women director on their boards, it was a very small initiative towards inclusive boards and gender diversity. Despite this, almost a third of these listed companies have not met the deadline. Worse, very few companies have responded positively to the penalties for non-compliance by appointing a woman director, almost a month past the March 31 deadline.
Though SEBI has given the companies some more time but if If they still don’t comply within a certain time, the penalty will increase. And If they don’t comply within the extended time either, the SEBI will have to consider other actions as well. In 2013, when the promoters had failed to comply with the minimum public shareholding requirement for companies, the SEBI froze the voting rights and corporate benefits (like dividends, bonus shares) of such promoters and were also banned from the capital markets and taking up other directorship positions.
In the current schedule for non-compliance, the SEBI has asked the stock exchanges to impose fines on companies that haven’t appointed a woman director. Companies that have not met the March 31 deadline have to pay a fine of Rs 50,000. The companies which fail to comply by October 1 will need to pay Rs 1,42,000 and Rs 5,000 for each day of non-compliance.