Female Leadership in India:Firm Performance and Culture

Ratna Sahay, Navya Srivastava and Mahima Vasishth
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Ratna Sahay: National Council of Applied Economic Research
Navya Srivastava: National Council of Applied Economic Research
Mahima Vasishth: NCAER and Bocconi University

India Policy Forum, 2025, vol. 21, issue 1, 138-199

Abstract: Globally, women's share in corporate leadership has been steadily rising, including in India. The female director mandate under The Companies Act (2013) in India marked a significant step toward gender-inclusive corporate leadership, requiring listed firms to have at least one woman on their board. Within a year, the percentage of listed firms without women on board plummeted from 53 percent to less than 10 percent. Despite this progress, India still lags in the share of women in middle and senior management roles at only 17 percent, compared to nearly 33 percent for the world. This paper documents the status of gender-inclusive corporate leadership and uses the woman director mandate in the Act to study its relationship with firm outcomes, including financial performance and corporate culture in India. Interestingly, we find that firms, on average, were appointing more women than mandated by the Act, suggesting the favorable impact of the current government's signal to foster women-led development and the positive experience gained by firms. At the same time, newly appointed women were younger and more educated than their male counterparts and their average number of directorship (the stretch factor) increased significantly compared to men. Combining personnel-level data from NSE-listed firms with firm performance data and employing a difference-in-differences in reverse econometric strategy, we find that having at least one woman on board is associated with higher economic performance and financial stability. Additionally, using almost 400,000 employee reviews scraped from a company review platform, we find that higher share of women in board positions correlates positively with employee ratings and sentiment scores only when firms also hire women in top management positions. This analysis highlights the business case of appointing more women at the top.

Date: 2025
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