Women directors are paid better. Their roles are bigger too

livemint.com:

Mint. Interestingly, the compensation of women independent directors has doubled in these five fiscal years, while their male counterparts have seen a 1.7x increase in the same timeframe.

The study, titled Independent Director Remuneration in India – Beyond the headlines, found that over the past five years, companies in the heavy manufacturing and IT sectors have paid higher to their independent directors compared to other sectors owing to their size, scale of operations, and composition of international directors. According to search firms, the fees are expected to grow further, with independent directors’ participation in various board committees likely to increase going ahead.

An independent director’s remuneration comprises sitting fees—for attending board meetings—and commissions linked to a company’s performance. While commissions are expected to increase, sitting fees, which vary based on whether a director attends a regular board meeting or a committee meeting, are capped at ₹1 lakh per meeting by the Companies Act.

The committee meetings could include those for audit, nomination, and remuneration committees. “The demand for experienced and highly skilled independent directors keeps rising along with the expanding scale of Nifty50 companies," said Dinkar Pawan, director at Deloitte, who focuses on executive performance and rewards.

“Independent directors also sit on boards across certain sub-sectors leading to parity in pay levels over time." The study noted that the rise in women independent director remuneration is on the back of increased responsibilities. For instance, in 2019, a female independent director was a member of two committees on average vis-à-vis three committees for male independent directors.