Woman Director Appointment Applicability under Companies Act

Refer the provisions of:

• Section 149(1) of the Companies Act, 2013;

• Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014; and

• Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Certain classes of companies whether listed or unlisted are required to appoint at least one woman director on the board and certain listed entities are required to appoint at least one independent woman director on the board.

Which companies are required to appoint woman director?

Following classes of companies shall make an appointment of a woman director for their companies:

1) all listed companies (i.e. companies whose shares are listed for trading in the stock exchanges);

2) all other public companies having (i) paid–up share capital of INR 100 crore or more; or (ii) turnover of INR 300 crore or more.

Note: For the above purpose, the figures of the paid up share capital or turnover as on the last date of latest audited financial statements shall be taken into account.

Newly incorporated companies, who fall under any of the above criteria, shall appoint a woman director within 6 months from the date of its incorporation.

Intermittent Vacancy

In case of any intermittent vacancy of a woman director, the Board of Directors shall make a fresh appointment of another woman director at the earliest, which shall not be later than the immediate next Board meeting or 3 months from the date of such vacancy, whichever is later.

Independent Woman Director

According to Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 on the composition of the board of directors of a listed entity in relation to woman director:

1) the board of directors shall have at least one woman director;

2) the board of directors of the top 500 listed entities shall have at least one independent woman director by April 1, 2019;

3) the board of directors of the top 1000 listed entities shall have at least one independent woman director by April 1, 2020.

How will the top 500 and 1000 entities be decided?

Ans: It will be determined on the basis of market capitalisation as at the end of the immediate previous financial year.