June 27, 2022

Volume XII, Number 178


June 24, 2022

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ESG: Equality and Diversity in Corporate India - Time to Walk the Talk

The push for increased representation from under-represented sections of society at the leadership and management level of Companies is not new. This war-cry has been rising over the past decade around the globe. From increasing representation of women at the board to representation of people from communities such as Hispanic, Black, Asian, Natives, gay, lesbian, bisexual, transgender or others, there is a dire need for encouraging and promoting competent individuals from such communities. Providing a platform at the highest levels in corporates has time and again been emphasised; consequently, legislations and compliances have been put in place to ensure implementation and execution of this goal. Despite necessary legislative and judicial actions being taken across the world; the problem still persists. The causes are plenty and range from a lack of efficiency in implementation to the same being considered as just another compliance and not an essential goal.

Recently, a Los Angeles County Superior Court, struck down1 the California board diversity statute, which required public corporations having an executive office in California to have at least one director from an underrepresented community2 on its board. The striking down of the statute may well be appealed on several grounds but the larger take-away is that the statute itself sought to remedy the issue faced by such under-represented communities over the years.

From an Indian context, the problem is no different in terms of the gravity and the need for building up consensus towards course correction.


While there have been legislative actions taken to bring about diversity, these steps have largely been restricted to representation of women on the board.

Under the Companies Act, 2013, the provisions provide for the mandatory requirement of having at least one woman director on the board of every listed company or unlisted public company, which has a paid up share capital of INR 100 crores or more or turnover of INR 300 crore or more, as of the date of the latest audited financials.3 Further, as per the amendment of 2018 to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”), it was made mandatory for the top 500 listed entities and the top 1000 listed entities to have at least one woman independent director.4 Despite this well-meaning regulatory push, there have been many instances where it was pointed out that companies appointed a woman director just to ‘comply’ with the aforementioned provision; rather than implementing the spirit of these legal provisions of including women in corporate decision making. Many accomplished and noteworthy women, who are at a leadership position, have shared instances which highlighted that the letter of the law was being followed in a mechanical manner rather than imbibing the spirit of inclusivity.5

One should also mention here that a meaningful change in the realm of gender diversity has started showing itself in certain parts of corporate India, especially within entities with investors, whether foreign or domestic, leading the charge. Established groups such as the Tata Group and the Mahindra Group are also part of this movement. The old-boys club is slowly but surely being dismantled.


Diversity is not restricted to gender. India has a rich history of diversity in terms of different communities, religions, vernaculars and heritage which face an overall issue of under-representation, when it comes to leadership roles in corporates.

In the context of representation from the Scheduled Castes and the Schedules Tribes, while the government provides for affirmative action in certain areas like government funded educational and professional institutions, there is no legal requirement for affirmative actions, in the context of private or public corporate bodies. The Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 provides requirements of identification and reservation of posts for disabled people, but this does not cover requirements for representation at the leadership level of public and/or private companies in India.


In 2021, the U.S Securities and Exchange Commission (“SEC”) gave its nod for Nasdaq Stock Market LLC’s proposal for Nasdaq listed companies, to have at least one director who self-identifies as an under-represented minority or LGBTQ+.6 This decision was based on significant effort from stakeholders including general counsel of leading companies, former corporate law judges and securities regulators, leading academics and distinguished law firms demonstrating that each stakeholder is an engine of change. While, the compliance was of a softer nature, in the sense that companies have to either comply with the same or furnish rationale as to why such appointment has not been made, India can and should draw inspiration from the same.

Diversity, as a concept in the truest meaning of the word, is a very wide ambit which is meant to cover all forms of diversity such as gender, caste, religious beliefs etc. While India has been pro-active when it comes to the measures taken for gender disparity being bridged, this is clearly just the start. The fact that a holistic representation of women being toned down to a mere compliance requirement of the letter of the law shows that the Nasdaq-approach of a softer law may not adequately solve the problem.

The intent is to maintain diversity, in the truest sense of the word and create a more inclusive and holistic ecosystem in Corporate India. The fact is that discrimination and bias on basis of gender, religious beliefs and caste, amongst others, is highly prevalent in India even today. While we can look outwardly and learn from others, India’s specific requirements will require that a special solution is designed and built just for India. As the world evolves and embraces inclusion, the time is perhaps here where larger discussions around diversity and its place in Corporate India need to be had by each of us, separately and together.

Special thanks to Mohak Kapoor for contributions to this article.


  1. “Corporate Leadership’s Indispensable Role in Promoting Equality”, Wachtell, Lipton, Rosen & Katz, April 06, 2022. https://corpgov.law.harvard.edu/2022/04/07/corporate-leaderships-indispe...

  2. California Board Diversity Statute - “Director from an underrepresented community” means an individual who self-identifies as Black, African, American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender.

  3. Section 149 of the Companies Act, 2013 read with Rule 3 of Companies (Appointment and Qualifications of Directors) Rules, 2014

  4. Regulation 17(1) (Board of Directors) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

  5. https://economictimes.indiatimes.com/news/company/corporate-trends/the-p...

  6. https://indiacorplaw.in/2021/09/looking-beyond-gender-to-make-corporate-...

Nishith Desai Associates 2022. All rights reserved.National Law Review, Volume XII, Number 129

About this Author

Sahil Kanuga Co-Head of International Dispute Resolution & Investigations Practice

Sahil Kanuga co-heads the International Dispute Resolution & Investigations Practice at research and strategy driven international law firm, Nishith Desai Associates.  


Known for his analytical and meticulous approach aimed to reach his clients' goal, Sahil has worked on an array of complex matters including Indian and international arbitrations. He aggressively tackles the challenges presented by each case - legal, financial, or otherwise and has advised on corporate and commercial laws, civil and constitutional...

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Arjun Gupta Attorney Nishith Desai Assoc. India-centric Global Law Firm
International Dispute Resolution & Investigations Practice Leader

Arjun is a Leader in the International Dispute Resolution & Investigations Practice and co-heads the Global Insolvency & Bankruptcy practice group at the multi-skilled, research-based international law firm, Nishith Desai Associates. Arjun is known for his in-depth knowledge in the insolvency and restructuring space, where he is regularly quoted by leading financial dailies and also appears in panels for televised debates on recent issues surrounding the space. He has also been invited as a speaker by various premier educational institutions to speak on the developing contours and...

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