Legal Provisions for Women Directors under the Companies Act, 2013

Legal Provisions for Women Directors under the Companies Act, 2013. As businesses scale, corporate governance becomes increasingly critical. One of the significant steps towards a more inclusive and robust Board structure is the appointment of a woman director, not just a matter of legal compliance, but also a smart business move which is a high level of decision-making and management in a company is the responsibility of its Board of Directors. The idea behind having a Board is to have a group of trusted and respected individuals who are responsible for protecting the interests of the shareholders. Since shareholders are often many in number and not directly involved in the day-to-day running of the company, the Board makes important decisions on their behalf.
As per section 2(10) of the Companies Act, 2013 states that "Board of Directors" or "Board", in relation to a company, means the collective body of the directors of the company;
According to section 2(34) of the Companies Act, 2013 "director" means a director appointed to the Board of a company.
In recent years, there has been more focus on diversity and inclusion in corporate governance. One of the key areas of focus is the need for women directors on corporate boards. While progress has been made, women continue to be underrepresented in leadership positions across various sectors. Having women on boards is not just a matter of fairness or equality, but a strategic decision that can bring significant benefits to companies, shareholders, and society as a whole.
Legal Provisions related to Women Director under Companies Act, 2013
According to Second proviso to sub-section (1) of Section 149 read with Rule 3 of The Companies (Appointment and Qualifications of Directors) Rules,2014, requires the following class of companies to appoint at least One Women Director:

Every listed company

Every other public company having:- a) paid up share capital of one hundred crore rupees or more; or b) turnover of three hundred crore rupees or more.

However, a company, which has been incorporated under the Act and is covered under provisions of second proviso to sub- section (1) of section 149 shall comply with such provisions within a period of six months from the date of its incorporation.
Example : In April 2021, Zomato expanded its board by appointing five independent directors, four of whom are women.
Sutapa Banerjee: An experienced professional in wealth management and behavioral insights. ?
Namita Gupta: Founder of Airveda and former executive at Facebook and Microsoft.
Gunjan Tilak Raj Soni: Former CEO of Zalora Group.?
Aparna Popat: Ex-Olympian badminton player
It shows how companies appointed women directors to their boards, aligning with the Companies Act, 2013, and promoting gender diversity in corporate governance.
Some Interesting Facts for non compliances: 
According to the Ministry of Corporate Affairs as of November 30, 2024, there are approximately 11.6 lakh women directors in public and private companies in India. The cumulative number of women directors in listed companies, un-listed public companies and private companies as on 30 November 2024 are as follows;

Category

Count of women directors associated

Listed Public companies

8,672

Unlisted public companies

46,939

Private companies (including OPCs)

11,11,040

Source: Posted On: 17 DEC 2024 3:26PM by PIB Delhi
Some FAQ’s on the Appointment of Women Directors on a Company’s Board
Q.1 Which types of companies are required to have a woman director?
Ans. According to Second proviso to sub-section (1) of Section 149 read with Rule No. 3 of The Companies (Appointment and Qualifications of Directors) Rules,2014, requires the following class of companies to appoint at least One Women Director:

Every listed company

Every other public company having: -
a) paid up share capital of one hundred crore rupees or more; or
b) turnover of three hundred crore rupees or more.

Note: That the paid-up share capital or turnover, as the case may be, as on the last date of latest audited financial statements shall be taken into account.
Q.2 Is obtaining a Director Identification Number (DIN) mandatory for the appointment of a woman director?
Ans. Yes, obtaining a Director Identification Number (DIN) is mandatory for the appointment of any director, including a woman director. Every individual intending to be appointed as a director must apply for a DIN by filing e-form DIR-3. If the individual already has a DIN, they do not need to apply again. The DIN must also be mentioned whenever any document or return containing information about the director is filed.
Q.3 Who is eligible to be appointed as a woman director in a company under the Companies Act, 2013?
Ans. To be appointed as a woman director in a company under the Companies Act, 2013, the prospective individual must not be disqualified under Section 164 and Section 165 of the Companies Act, 2013. Moreover, the prospective individual must provide the company with her Director Identification Number (DIN) as per Section 152(4) and Rule 14 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and submit a statement in Form DIR-8 under section 164, declaring that she is not disqualified to serve as a director under the requirements of the Act.
Q.4 What should a company do if there is an intermittent vacancy of a woman director?
Ans. As per Rule No. 3 of The Companies (Appointment and Qualifications of Directors) Rules,2014 if there is an intermittent vacancy of a woman director shall be filled-up by the Board at the earliest but not later than immediate next Board meeting or three months from the date of such vacancy whichever is later.
Q.5 What can be the sitting fee for a woman director attending board or committee meetings?
Ans. According to section 197(5) read with Rule 4 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 prescribed that a company can pay a sitting fee to a woman director for attending board or committee meetings, as decided by the Board of Directors. However, the sitting fee must not exceed one lakh rupees per meeting. Additionally, the sitting fee for independent directors and women directors cannot be less than the fee paid to other directors.
Q.6 What is the penalty for a company and its officers if they fail to comply with the requirement of appointing a woman director?
Ans. If a company fails to comply with the requirement of appointing a woman director, both the company and any officer in default will be liable for a penalty under Section 172 of the Companies Act, 2013. The company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees, and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default. Every company should take the company law advisory services to avoid any such non compliances and to avoid hefty penalty under the companies act 2013. 
Know more about  Independent director appointment under NBFC company.

As businesses scale, corporate governance becomes increasingly critical. One of the significant steps towards a more inclusive and robust Board structure is the appointment of a woman director, not just a matter of legal compliance, but also a smart business move which is a high level of decision-making and management in a company is the responsibility of its Board of Directors. The idea behind having a Board is to have a group of trusted and respected individuals who are responsible for protecting the interests of the shareholders. Since shareholders are often many in number and not directly involved in the day-to-day running of the company, the Board makes important decisions on their behalf.

As per section 2(10) of the Companies Act, 2013 states that "Board of Directors" or "Board", in relation to a company, means the collective body of the directors of the company;

According to section 2(34) of the Companies Act, 2013 "director" means a director appointed to the Board of a company.

In recent years, there has been more focus on diversity and inclusion in corporate governance. One of the key areas of focus is the need for women directors on corporate boards. While progress has been made, women continue to be underrepresented in leadership positions across various sectors. Having women on boards is not just a matter of fairness or equality, but a strategic decision that can bring significant benefits to companies, shareholders, and society as a whole.

Legal Provisions related to Women Director under Companies Act, 2013

According to Second proviso to sub-section (1) of Section 149 read with Rule 3 of The Companies (Appointment and Qualifications of Directors) Rules,2014, requires the following class of companies to appoint at least One Women Director:

Every listed company
Every other public company having:- a) paid up share capital of one hundred crore rupees or more; or b) turnover of three hundred crore rupees or more.

Example : In April 2021, Zomato expanded its board by appointing five independent directors, four of whom are women.

Sutapa Banerjee: An experienced professional in wealth management and behavioral insights. ?

Namita Gupta: Founder of Airveda and former executive at Facebook and Microsoft.

Gunjan Tilak Raj Soni: Former CEO of Zalora Group.?

Aparna Popat: Ex-Olympian badminton player

It shows how companies appointed women directors to their boards, aligning with the Companies Act, 2013, and promoting gender diversity in corporate governance.

Some Interesting Facts for non compliances:

According to the Ministry of Corporate Affairs as of November 30, 2024, there are approximately 11.6 lakh women directors in public and private companies in India. The cumulative number of women directors in listed companies, un-listed public companies and private companies as on 30 November 2024 are as follows;

Category	Count of women directors associated
Listed Public companies	8,672
Unlisted public companies	46,939
Private companies (including OPCs)	11,11,040

Source: Posted On: 17 DEC 2024 3:26PM by PIB Delhi

Some FAQ’s on the Appointment of Women Directors on a Company’s Board

Q.1 Which types of companies are required to have a woman director?

Ans. According to Second proviso to sub-section (1) of Section 149 read with Rule No. 3 of The Companies (Appointment and Qualifications of Directors) Rules,2014, requires the following class of companies to appoint at least One Women Director:

Every listed company
Every other public company having: -

a) paid up share capital of one hundred crore rupees or more; or

b) turnover of three hundred crore rupees or more.

Note: That the paid-up share capital or turnover, as the case may be, as on the last date of latest audited financial statements shall be taken into account.

Q.2 Is obtaining a Director Identification Number (DIN) mandatory for the appointment of a woman director?

Ans. Yes, obtaining a Director Identification Number (DIN) is mandatory for the appointment of any director, including a woman director. Every individual intending to be appointed as a director must apply for a DIN by filing e-form DIR-3. If the individual already has a DIN, they do not need to apply again. The DIN must also be mentioned whenever any document or return containing information about the director is filed.

Q.3 Who is eligible to be appointed as a woman director in a company under the Companies Act, 2013?

Ans. To be appointed as a woman director in a company under the Companies Act, 2013, the prospective individual must not be disqualified under Section 164 and Section 165 of the Companies Act, 2013. Moreover, the prospective individual must provide the company with her Director Identification Number (DIN) as per Section 152(4) and Rule 14 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and submit a statement in Form DIR-8 under section 164, declaring that she is not disqualified to serve as a director under the requirements of the Act.

Q.4 What should a company do if there is an intermittent vacancy of a woman director?

Ans. As per Rule No. 3 of The Companies (Appointment and Qualifications of Directors) Rules,2014 if there is an intermittent vacancy of a woman director shall be filled-up by the Board at the earliest but not later than immediate next Board meeting or three months from the date of such vacancy whichever is later.

Q.5 What can be the sitting fee for a woman director attending board or committee meetings?

Ans. According to section 197(5) read with Rule 4 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 prescribed that a company can pay a sitting fee to a woman director for attending board or committee meetings, as decided by the Board of Directors. However, the sitting fee must not exceed one lakh rupees per meeting. Additionally, the sitting fee for independent directors and women directors cannot be less than the fee paid to other directors.

Q.6 What is the penalty for a company and its officers if they fail to comply with the requirement of appointing a woman director?

Ans. If a company fails to comply with the requirement of appointing a woman director, both the company and any officer in default will be liable for a penalty under Section 172 of the Companies Act, 2013. The company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees, and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default. Every company should take the company law advisory services to avoid any such non compliances and to avoid hefty penalty under the companies act 2013.

Know more about Independent director appointment under NBFC company.