Boardroom Diversity and Inclusion Measures

(Corporate Governance)
Diversity within the boardroom are one among the foremost important criteria for
organizational performance and corporate governance efficiency within the coming decade.
Diversity refers to the presence of people who, as a group, have a wide range of visible and
invisible features that they were born with or acquired over time. Gender identity, race or
ethnicity, LGBTQ+ status, PWDs, and others may be considered. On the opposite hand,
'Inclusion' refers to the removal of all excluding barriers as well as the promotion of inclusive
mindsets, behaviours, procedures, and practices.1

In this article, we'll look at when pandemic has thrown our lives into disarray, requiring us to
adjust to wholly new situations why diversity is important in the boardroom and the need for
inclusion to create a diverse and strong board. The COVID-19 epidemic is proving to be one
of the most difficult leadership tests of company executives around the world. Organizations
that support identity diversity advocate for greater inclusion of women and racially or
ethnically diverse individuals in the boardroom, while those who favour skill-based diversity
focus more on an individual’s skills and experiences as they relate to corporate strategy. 

As per 2018 Mckinsey & company international study found that more diverse businesses
were 33% more likely to have higher financial returns. 2 There is ample evidence that diverse
and inclusive companies are likely to make better, bolder decisions a critical capability in the
crisis. For example, diverse teams have been shown to be more likely to radically innovate
and anticipate shifts in consumer needs and consumption patterns helping their companies to
gain a competitive edge.3

There’s little debate that driving diversity should continue to be an important priority for all
organizational leaders; nevertheless, it is becoming increasingly evident that focusing on
diversity without also focusing on inclusion is not a winning strategy. 4 Diverse boards are
better prepared to deal with the challenges of a complex, ever-changing corporate
environment, such as digital transformation and international competition. Boards are better
able to assess the wide-ranging effects of their choices when members have diverse
viewpoints. More effective risk management, better alignment with customers, workers, and
trading partners and a more innovative corporate culture can all result from board diversity.

1
Monika Navandar, Why inclusion work diversity getting stuck in India, Human Capital, (Nov 18,2019)
https://humancapitalonline.com/industrypractice/details/533/why-inclusion--diversity-work-is-getting-stuck-in-
india
2
McKinsey & company, Diversity Wins: How inclusion matters), 3(2020),
https://www.mckinsey.com/~/media/McKinsey/Featured%20Insights/Diversity%20and%20Inclusion/Diversity
%20wins%20How%20inclusion%20matters/Diversity-wins-How-inclusion-matters-vF.pdf
3
Ibid.

4
Laura Sherbin and Ripa Rashid, “Diversity doesn’t stick without inclusion,” Harvard Business Review,

February 1, 2017
Recently, the case of Hinduja Brothers and Valli Arunachlam Ambadi made it pertinent to
assess the effectiveness of gender diversity and inclusion initiatives in Indian corporate. In
Hinduja Brothers Dispute, the tussle was about the family agreement which says, One
brother's assets belong to all of them, and each brother will name the others as executors.
Srichand and his daughter Vinoo took the letter to court, asking the family’s assets should
be separated. According to the judgement, if the claim is successful, all assets in SP's
name will transfer to Vinoo and her immediate family upon SP's death, including the
whole stake in Hinduja Bank. 5 In this regard the other three brothers commented that "It is
very unfortunate that these proceedings are taking place as they go against our founder's and
family's values and principles,"6.

In Ambadi case, the elder daughter of late M.V. Murugappan, has sought an equal
opportunity in the family business on the same terms as the male heirs. She wants a board
seat on Ambadi Investments Ltd (AIL). This resolution was rejected by the shareholders
to appoint her as a director on the board of the company. She said in an interview that “It
is evident that the family cannot tolerate women in their boardrooms, and they have
showcased their considered view in this regard. It is very unfortunate that the AIL
shareholders, the overwhelming majority of whom are also board members, are not able
to understand what contributions women can make on the board.” 7

In my view, it is time for Indian corporate boards to start measuring I&D activities which
gives them more clarity and allows them to focus more on attaining goals.

 They should consider recruiting PWDs, LGBTQ+ people, women on leave, long-term
unemployed people, retirees, and ex employees.
 They could use software to create bias-free job descriptions and expand their candidate
pool.
 Invest in and collaborate with experts that give real interventions for changing
behaviour, culture, and processes in order to create inclusive organisations.
 The corporate should create an inclusive visual atmosphere by incorporating images of
various groups, naming conference rooms with gender-neutral names, and so on.
 Disseminate the zero-tolerance code of behaviour for discrimination, harassment, and
bullying

5
George Mathew, Hinduja brothers: What property dispute is about, how much is at stake, The Indian express,
(June 26, 2020,7;42 AM) https://indianexpress.com/article/explained/explained-what-is-at-stake-in-the-big-
fight-in-hinduja-empire-6476054/
6
Nevin John, Hinduja’s brother fight: What went wrong in the family?, Business Today.In, (June 25, 2020,
10:11 PM) https://www.businesstoday.in/current/corporate/hinduja-brothers-in-battle-what-went-wrong-in-the-
family/story/408047.html

7
K.T. Jagganath, In Valli Arunachalam's Tussle With the Murugappa Group, a Familiar and Bitter Family Tale,
The wire, (Sep 23, 2020),https://thewire.in/business/valli-arunachalam-murugappa-group-business-family