“One woman is the invisibility phase; two women is the conspiracy phase; three women is mainstream,” Forbes Magazine once wrote. “A key aspect of a healthy corporate culture is diversity of thought, skills and experience: The corporate boardroom is the latest stage for this controversial issue.”
Quotas for women are a hot topic. According to Catalyst, companies that have more women in the boardroom far outperform those companies that employ fewer women directors: by 66% return on invested capital of companies, 53% return on equity, and 42% return on sales between 2001 and 2004. Ginkla Toegel recently quipped in Bloomberg BusinessWeek, “the financial crisis demonstrated the testosterone-fueled excesses of mono-cultural boards. Would it have happened if Lehman Brothers was instead Lehman Sisters?”
In reality, women are far from becoming the mainstream in U.S. corporate boardrooms: Women make up 3% of CEOs and occupy around 16% board seats (up 0.5% from 2009) at the nation's Fortune 500 companies, and 15.2% of the directors at the largest companies are women. “The proven tipping point is just 30%,” says Linda Tarr-Whelan, author of Women Lead the Way. “When women’s representation at the top reaches 30%, real change starts to happen.”
That said, only 25% of women support quotas in the U.S., according to a Harvard Business School survey. But not all is bleak: The percentage of American women in the work force is below only Scandinavian levels, and we earn a higher ratio of men’s wages than anywhere outside of Scandinavia, according to Peter Baldwin, professor of history at the University of California.
The World Economic Forum (WEF) introduced a quota for women earlier this year at its annual meeting in Davos, requiring at least one of five executive delegates to be female. By the way, the WEF has also stated that the U.S. could boost its GDP by as much as 9% by putting more women in leadership positions in business and government and by correcting pay inequities.
The E.U. Commission will mandate quotas for women across the European Union’s 27 member states by 2012 and declared that “making the most of Europe's female talent in the workforce is not just good for business — it also benefits the economy and society as a whole.”
- Norway has already mandated in 2003 that publicly-traded corporations employ at least 40% women executives.
- In France, a 40% quota for supervisory boards at the country's largest companies was introduced in mid-January 2011, with firms required to meet the goal by 2017.
- Spanish firms have until 2015 to hit the 40% mark.
- The Netherlands is working on a law that would mandate a 30% share of women on management boards.
- Belgium, Britain, Sweden and Germany are considering, and vigorously debating, legislative measures as well. A decade ago, Germany launched a voluntary initiative for companies to appoint women to boardrooms that had little impact.
In an ideal world, individuals should be appointed strictly on merit, not because of their gender. But, in some industries, aren’t men still promoted by a much prevalent old-boy-network mentality? Are quotas needed as a temporary jumping board so that women can reach the higher echelons of the corporate ladder and the cushioned seats in the boardrooms and gain visibility? Could they change cultural stereotypes and the perception of women? Or are mandated quotas just reverse-discrimination that conveniently sweep the real problem under the rug, namely the huge underrepresentation of women at all executive levels?
In addition, on April 26, we will host an event on the topic: “Women at the Table: Realities, Roadblocks and Strategies for Earning Seats on Corporate Boards.”
“We use racial, demographic and economic quotas. Why stop there? Quotas combat prejudice and pre-conceived opinions about someone’s ability to advance; they help fight discrimination and nepotism, shatter glass ceilings and old-boy-networks. Quotas should never supplant merit, skills and hard work, however. And if you take the Scandinavian countries as an example, they actually work. Not because Scandinavian men are nicer but because quotas have dramatically increased women’s overall presence in all top levels of society, making women executives and female bosses the norm. Young girls learn that all professions are open to them, that they can reach the top wherever they chose. And as a consequence, businesses (and society as a whole) now regard good, affordable child-care and parental and sick leave as a human right — for men and women.”
Tekla Szymanski, editor, writer, founder of “Where Old Media and New Media Meet” Editorial Services and managing editor of nywici.org.
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