Are Gender Quotas for Executive Boards a Good Idea?

Then & Now

It’s hard to deny that gender inequality has followed women throughout history. Over the centuries, women have faced institutional discrimination at a societal level in areas ranging from education and careers to political representation. Although this is changing, this history and the persistent ideas its fostered about gender differences and capabilities has had severe (and extremely unfair) repercussions on their career development.

 Despite the significant advances of women in education and many job sectors, women still remain underrepresented in business leadership positions around the globe. In fact, while women are half of the overall population and 60% of the world’s university graduates, they represent on average only 14% of board members of publicly listed companies.

Experimenting with Quotas

In response to that, many countries are introducing gender quotas for corporate board membership. Historically, gender quotas have been most prominently introduced to increase the proportion of female candidates in political offices, and various countries have effectively implemented them to increase female representation in the business world.

One well-known example is Norway, where gender quotas for public, limited, state-owned and inter-municipality companies were introduced in December 2003. Since then, female representation in Norway has gradually grown, reaching its peak in 2008 with national board membership that was 40% women. Following Norway’s corporate reform, Belgium, France, Iceland, Italy, the Netherlands and Spain have adopted gender quotas with considerable increases in the share of women on publicly listed boards.

Germany has recently made its own big commitment to promoting gender equality within both the private and public business sectors. On January 1, 2016, a fixed gender quota became applicable, requiring the country’s listed companies to give 30% of the seats on their supervisory boards and executive committees to women, with a plan to increase the quota to 50% in 2018. Moreover, the new law states that, if the required threshold of female membership is not reached, the number of seats falling short will remain empty until appropriate women can be found to fill them.

The Controversy

The introduction of a gender quotas has stirred up controversy in European countries. Some believe that unqualified people may be given a position just to satisfy the rules, or that the quota will impair company performance and the quality of the talent pool. There is even a widespread belief that gender quotas discriminate against men and stigmatize women. Leaders of some countries (e.g., Britain) have stated that quotas are not an effective way to improve female representation and have chosen not to implement them.

On the other hand, other countries and also studies have expressed and showed the benefits of this reform. One example is provided by Catalyst, a group that lobbies for women in business, which has demonstrated that companies with diverse boards attract more talented employees, are more innovative and have more substantial financial success than male-dominated companies.

Whatever the dispute, the reality is that there are not enough women in top business positions across Europe. Despite the fact that increased diversity does help business growth. For this reason, quotas might be considered, as stated by Elisabeth Morin-Chartier (the chair of the European Parliament’s Committee on Women’s Rights and Gender Equality), a sort of “necessary evil” that will speed up our advance toward a better gender balance on the corporate boards of European companies.

This article was researched and written by Recruitment Consultant Gaia Vallese. Gender quotas are an important consideration when planning your leadership teams and future life science business growth. Let us help guide your company forward. Call us at +31(0) 20 29 00 016 for an enlightening conversation about our executive recruitment services or email: talktous@seussrecruitment.com.