Wednesday, 27 July 2011

Are quotas the way forward?

The debate on whether governments should impose quotas for women in senior positions has been going on for quite a while now. In Europe, Norway paved the way in 2006 by imposing a minimum quota of 40% of women in corporate boards. Today, many say the initiative worked (yet, this has to be looked at the broader Norwegian context that allows for rather family-friendly policies). And the enthusiasm for quotas is noticed in other European countries too: in France, a new law now requires 40% of board seats for women by 2017; Germany and the Netherlands are also considering a similar law. And on 6 July 2011, the European Parliament called for EU-wide legislation stipulating that women should make up 30 percent of top management in the largest listed EU companies by 2015. If the call for these voluntary measures fails, the enforcement could become legally binding.

But despite an emerging trend of “pro-quotas” in Europe, the debate is far from closed as demonstrated by other governments taking alternative routes. A recent report issued by the UK government urges UK companies that they be more transparent and that they set voluntary targets for boosting female board representation and to improve business performance. If these targets are unsuccessful after 2015, quotas could be an alternative. The report provides some international comparisons with countries that have already opted for quotas and countries that are taking alternative action to quotas enforcement. For example since July 2010, Australia has required that companies disclose the proportion of women in senior management and report on progress on gender objectives in their annual report. The new model came into force in January 2011 and also looks very promising. As Roger Carr, chairman of the British energy company Centrica puts it, “aspiration rather than legislation is the correct way forward”. His company has 5 women on its 15-member board.

Ok, lets look at this. It is argued that there are quite a few advantages in adopting such a drastic measure as quotas: quotas help redress existing prejudice that prevent women from accessing senior positions; also, as women represent half of the world population, quotas in politics are a way to represent the entire population, and quotas in boardrooms mean that women are more likely to answer the needs of women consumers, which is the largest group of consumers in the world; finally, there is evidence that firms with more women in senior positions perform better than those runs solely by men, and that mixed boards make better decisions.

However, there are also clear disadvantages that can be argued for in establishing quotas. In politics, quotas can be seen as undemocratic, as it implies that some of the candidates are imposed; the issue of women accessing senior positions because of their gender rather than on the basis of their merit is another hurdle; and quotas are simply against the principle of equal opportunity for all.

The Economist just published a couple of articles against mandatory quotas, stating that imposing quotas in the boardroom is “the wrong way to promote women” and “a bad idea”.  Quotas risk attracting women that are poorly prepared for the position offered, and it can have a negative impact on the company’s turnover, as shown in the case of Norway by a study from the University of Michigan. The articles in The Economist argue for alternative measures to tackle the loss of female talent in companies. In fact, the problem is not just the sexist stereotypes or the lack of role models for women: the main issue is the lack of flexibility in the workplace. I tend to agree with this view. If women perform as well as men at university, why is it that they lag behind men when it comes to accessing senior positions, apart from the obvious entrenched cultural reasons? Surely this has to do with managing work and family priorities.

It is no surprise that the gender gap affects mainly senior positions, as these are positions that are the most demanding. Women, on average, tend to spend more time looking after children and aging parents as well as performing domestic tasks than men. The difficulty to combine family responsibilities with work obligations means that they have to switch to part-time or flexi-time to make their time more manageable, thus making it nearly impossible to climb up the career ladder.

As argued in The Economist, companies should strive to make work more family-friendly if they are to attract the best pool of talent. In my opinion these family-friendly measures should be targeted at both women and men. Similarly, governments should further support paternity leave policies.
The articles also argue that companies should use the advances of technology and promote telecommuting, as numerous tasks can be done from home. The United States are already showing the way, with nearly 20% of employees that telecommuted in 2010. Breaking the glass ceiling for women is possible, and does not necessarily have to go via the enforcement of quotas. Extended and flexible paternity leave, more flexible hours, telecommuting, training or mentoring for women, and other family-friendly measures are definitely happening in a number of countries, but efforts should be more focused and taken more seriously. Exploring these alternatives further – and setting voluntary targets rather than enforcing quotas through legislation – should start helping reduce the gender representation gap in senior positions.

What do you think?


More on the topic on Wikigender:

Debate on Gender Quotas
Gender Equality in Corporate Boards
Special Focus of the Community Portal on Women, Leadership and Quotas
Motherhood + Career = Success?

1 comment:

  1. Sylvia Hordosch4 August 2011 at 01:07

    "Quotas risk attracting women that are poorly prepared for the position offered."

    Sure, but the current situation of de facto quotas for men risks attracting men that are poorly prepared for the nomination/appointment or election to a senior position.

    The Convention on the Elimination of All Forms of Discrimination against Women notes in article 4.1. that temporary special measures [note: temporary!] are to accelerate de facto equality between women and men. Such measures will be discontinued when the objectives of equality of opportunity and treatment have been achieved.

    Quotas are not drastic, they are one way to achieve equality. They need to be adapted to the political, economic and regional circumstances. They need to be accompanied by other measures - such as flexible work arrangements for women and men. They have the potential to increase the transparency of selection processes by defining clear selection criteria. They move people beyond their complacent attitudes and stereotypes of women's and men's proper roles and capacities.