True: It is important to get more women into top corporate positions.
The question is whether this should be done by obliging companies to fulfil quotas. Are quotas good or bad?
Across Europe, women are strongly under-represented on corporate boards. European Commission statistics show that in January 2012, women occupied on average just 13.7 % of board seats for the largest publicly listed companies in EU Member States. In November 2012, the Commission proposed a Directive aimed at the under-represented sex attaining 40% of non-executive board-member positions in publicly listed companies, with the exception of small and medium enterprises. Some European countries have already established gender quotas; for example Norway, Spain, Iceland, and most recently France.
Supporters of establishing legal gender quotas often refer to the system in Norway as a successful example, where 40% of corporate board members are, by law, required to be women. But isn’t there a chance that the women, who get selected as a result of a quota, may be less qualified than their male counterparts? A study from the University of Michigan noted that this law in Norway has, “led to younger and less experienced boards and a decline in operating performance, consistent with less capable boards”.
In addition, how would such a law work in practice? Let’s say 10 people apply for a position in a company and three of them are women. What happens if the three best candidates are men, but with the gender quota in place one women must be employed? Is this fair to the male candidate who was better for the job, but did not get it because he was not a woman? And is it fair for the company?
To be qualified as a manager, it does not depend on one’s gender, but on education, competence and experience. Enforcing gender quotas would be like saying women can’t get the job on their own merits. We should all be selected on the basis of our qualities and capabilities. Therefore, I’m not sure if gender quotas are the correct way to obtain the goal of having more women on corporate boards. Perhaps, a more effective way to increase the number of women would be for Member States to share best practices. There are currently various national measures in place geared towards increasing the number of women on boards. For example in Germany, the DAX30 companies have demonstrated an increase in the share of women represented on boards. In the Netherlands, a law entered into force (the One Tier Board Act) which introduced that 30% of board members seats will have to be occupied by women. If a company fails to meet this target, it must clarify which measures will be taken to reach the target of 30% in the future.
I definitely agree that we need more women in high ranking jobs. But, this doesn’t necessarily mean that we need gender quotas. What we need to change first is the mind-set currently in place. For example, by providing better public childcare or increasing the parental leave for new fathers the perspective of people in society will slowly change. I believe this would be a better way to solve the problem, instead of the bureaucratic way that is proposed now.
The IMCO committee will vote on this Directive today, so expect further developments on this shortly.
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