NEW DELHI -- As Indian companies rush to meet a deadline to appoint women to their boards, some high-earning business owners have a solution that meets the letter if not the intention of the law: appointing their wives.
India's market regulator, the Securities and Exchange Board of India, has set a deadline of Wednesday for all of the country's listed companies to name at least one female director. In the 12 months after the order was first announced in February 2014, only 580 companies out of thousands had appointed women, according to local reports. More than 80 appointments were family members of company owners.
India's top earners are setting a high-profile example of applying the letter of the law. Mukesh Ambani, the second-wealthiest Indian who heads the petrochemicals-to-telecommunications conglomerate Reliance Industries Ltd., appointed his wife, Nita Ambani, to the company's board.
Industrialist Gautam Singhania named his wife, Nawaz Singhania, as a nonexecutive director of his company, Raymond Group, one of the world's largest textile manufacturing conglomerates.
Both women have business experience, though not directly applicable to overseeing a conglomerate.
Globally, women lag far behind men in making their way to top management positions and corporate boards. But the situation is dire in Asia, where among the leading economies, China tops the list with women making up 8 percent of corporate board directors. Japan with 2 percent and South Korea with 1 percent are at the bottom of the heap. In India, women are 5 percent of directors.
"You can have as many laws put in place, but unless the promoter or the management of the company wants to bring about a change and better governance, there are always ways to comply in letter, but not in spirit," said Pranav Haldea, managing director of Prime Database, a firm that tracks listed companies.
There are about 9,000 listed companies in India. The Bombay Stock Exchange, which is the biggest Indian bourse, has about 4,200 active member companies. The rest are divided between the National Stock Exchange of India Ltd. and a clutch of smaller regional stock markets.
Experts say that while the intention of appointing women was to bring about diversity in the boardroom, naming family members to the board might not add to healthy debate and decision-making since someone close to a powerful figure in the company would be unwilling to challenge them.
Others feel appointing family members should not necessarily be viewed as negative.
"There is no reason that companies should not appoint women from the family to be on the board as long as they have the necessary qualifications," said Shachi Irde, executive director of Catalyst India WRC, which works to expand opportunities for women in the workplace.
The market regulator initially gave companies eight months to comply with its requirement for greater female representation on boards. The deadline was later extended to April after companies asked for more time.
But last week, the regulator warned that the April deadline was not going to be extended and erring companies would face strict regulatory action by the Securities and Exchange Board and stock exchanges.
"The consequences will be according to the law and can be very serious," securities board chief Upendra Kumar Sinha said, although he did not specify what the penalties would be.
Business on 03/28/2015