New Companies Law to Ensure Women Directors in PSU

In a significant move, Indian government made it mandatory for certain class of public companies to appoint at least one woman director on their boards under the companies’ law.

In a written reply to the Lok Sabha, Finance Minister Arun Jaitley said "The Companies Act 2013 and the rules framed there under mandate listed and unlisted public companies having paid up share capital of Rs 100 crore or more or a turnover of Rs 300 crore or more are required to appoint at least one woman director on the board of directors".

Jaitley also said that the government had not received any representations from public sector companies to revise spending limit for activities related to Corporate Social Responsibility (CSR) norms.

Under the new Companies Act, certain class of companies is required to shell out at least 2 percent of their three-year annual average net profit towards CSR activities.

"The government has not received any representations from public sector undertakings (PSUs) to revise 2 percent Corporate Social Responsibility (CSR) norms," he said.

The Companies Act, 2013 has incorporated various provisions aimed at strengthening corporate governance in India, Jaitley said.

These include enhanced responsibilities for the board and its committees like the audit committee as well as nomination and remuneration committee, enhanced disclosures as well as better norms for accountability of auditors, he added.