Govt seeks explanation from companies not having women directors

NEW DELHI: Initiating action for non-compliance, the Corporate Affairs Ministry has asked many unlisted companies to explain why they have not appointed women directors on their boards as mandated under law. Thousands of corporates are required to have at least one woman director on their boards under the provisions of the Companies Act, 2013. Noncompliance can attract penalties.

The ministry has decided to initiate action after noticing that many companies are yet to comply with the woman director norms, according to sources. The Registrar of Companies (RoC) has started issuing show-cause notices to unlisted firms in this regard, sources said. Certain class of unlisted companies were required to have at least one woman director on their boards by March 31, 2015. Most provisions of the new law for companies came into effect from April 1, 2014.

After receiving their responses, the ministry would decide on appropriate action against such companies and under the Act, penalties can also be imposed. As per the norms, a corporate needs to inform the ministry about appointment of a director within a month from the date it is made. Certain class of listed and unlisted firms are required to comply with the woman director rules.