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Corporate India should look to bring more caste diversity: Ajit Dayanand

DIVYA RAJAGOPAL, ET Bureau Aug 24, 2012, 08.09PM IST

India's corporate board, which is the most powerful group when it comes to influencing key policy decisions lacks diversity says Ajit Dayanand and his team from the University of British Columbia. In a research titled 'Corporate Boards in India Blocked by Caste?' published in Economic and Political Weekly, it says 65% of the members of the Indian corporate board are from the forward caste, which makes boardrooms a small and closed group. Divya Rajagopal from Economic Times spoke to Ajit Dayanand on the implications and need for this research .

Is it important that we see a caste diversity in corporate board ?

Dalits have certain skill sets, and they were not able to move up the supply chain or corporate ladder because they do not have the business skill set., they don't the marketing they don't know how to handle the tax matter, they don't . But they are good in production. But they are not able to move up the supply chain that is the issue. And if they are able to move up the supply chain, that is the social mobility and that is what one would desire for them ?

There is a debate that is going on the reservation in private sector? How do you see reservation in private sector and diversity ?

No,one would desire this would happen on voluntarily basis. My next research is to look at caste diversity over time. Because this is a static picture, and the companies database is 60 years old. Diversity could be on the basis of caste, gender, it could be based on any other parameter. It is disappointing, but the debate has to be carried forward. But as you have mentioned there is initiative in part of industry to be inclusive, that is one should look for to bring more diversity. But if the state organisations or industry orgs can take some initiative to have some diversity. it will benefit them as well as lower caste. because they will be able to increase their pie and profits at the same time they will be able to bring some social change.

Do we see this changing because even now board membership is related to affiliation.

They are not connecting with other section of society. A forward caste board member is a board member in other 16 or 17 companies which is of similar caste. he or she is not able to connect with someone from other members of other caste, this is worrisome. If you look at countries which have progressed like the United states, they were able to move beyond the issue of race and colour, still there is a problem but they have moved beyond that. And that is what the worry is.

Do you see that changing?

Industry is talking about inclusiveness and all. So there is lot of talk, that's all. Now one should be able to walk the talk.

In United States how is the representation ?

The gender representation has improved. but still there are corporate groups which are dominated by religion. In India, if you look at the representation of gender it is in single digit. That is really disappointing

Next on auditors?

What we are looking at is this connection between various only within the caste. Suppose there is a x caste, are they in similar boards in other companies, do they connect with their own caste in other companies. Secondly if you look at auditors which is the important components of corporate governance, do they safeguard the caste interests

Is it really important, for corporate India to drive for inclusive society?

It is in their interest to do that. it will help them improve their sales and profits. They are not selling products and services to your own caste. So it is in their own self interest that they bring inclusivity. You look at cola wars. When Pepsi entered late it went and captured the market which was dominated by the afro Americans,and this helped them catch up with Coca Cola. So coke also couldn't stay behind and did the same. So for the sake the business interests diversity is essential.