If We Want More Women in the Boardroom, Do We Need to Legislate It So?

As the boardroom presents itself as the final frontier in the battle of the sexes, many have called for gender parity legislation and quotas to address the imbalance. But do quotas work? And, will they fundamentally change corporate culture for the better?

In this debate, the For side argues interventions are essential to redressing historical discrimination, while the Against side takes the position that using the poison for the cure may not be the panacea progressives hope for.

Yes. If You Don’t Legislate for Gender Equality,
It Just Won’t Happen

While there has been considerable progress in recent years in leading global markets, there remains a job of work to be done to realise true gender equality at senior levels in major organisations.  In the US, women hold just 19.2 % of board seats at S&P 500 companies.  Of the 408 people on the boards of companies quoted on the Irish Stock Exchange in 2019, just68 (17%) are female.  In Latin America, the proportion is a miserly 6.4% of board seats at the top 100 companies in the region.

Even in the UK, which has made more progress on gender equality than most countries, while women hold 33% of board positions in FTSE 100 companies, they account for just 23% of Executive Committee members.  This is a pity.  Throughout a long career, I experienced the perils, frustrations and tribulations of sitting on boards dominated by cabals of successful alpha-males.  The experience was quite frequently almost laughably stereotypical. Debate sometimes verged on the rancorous, with a tone that signalled a (no doubt unintentional) lack of respect for the opposing or minority viewpoint. 

Yet it remains the case that in many companies, there is no tacit acknowledgement even that appropriate gender balance is essential to good business practice.  There are two broad strands of reasoning that help to explain this, one operational, the other socio-cultural.

Operationally, business responded to the economic crisis of 2008 by exploring multiple-ways to increase productivity and, with it, profitability.  Thomas Piketty has shown how the share of total income taken by Capital since 2008 has increased at the expense of owners of the other factors of production, principally Labour.  Fewer people, working harder, producing more, paid the same—that’s the principal way that the 1% have safeguarded their incomes and wealth in the era of Late Capitalism. 

Thing is, women in the prime of their careers are often also in the prime of life! So major firms like the Tech giants like Apple, Google and Facebook have introduced incentive schemes to encourage women to pursue their career ambitions while retaining the option to have a family later in life.  Notwithstanding this kind of incentive, it can be hard to persuade women to embrace the sometimes extreme ‘work-life imbalance’ required in their thirties and forties as easily as their male counter-parts, even with significant workplace flexibility and supports. And, without significant State investment in infrastructure and child-care supports, the Capitalist profit-maximiser may be unlikely to take the longer view when it comes to mandated gender balance.   

Yet, it’s in the area of Workplace Culture that many of the most intractable barriers to gender equality occur. Culture is defined generically as ‘shared meanings’ and these can be difficult to debate, let alone to change. Why? Because culture is made manifest by things like behaviour style, language and degree of overt competitiveness.  Like it or not, most women respond differently to men when it comes to workplace culture.  Watch a typical group primarily composed of women work to solve a problem.  The method by which the task is to be addressed is debated then agreed, while the atmosphere is generally collaborative and supportive. By contrast, their male colleagues can sometimes be overcome by sheer desire to succeed, at the expense of a successful outcome.

Without calm, respectful, collaborative ways of working, women may be unlikely to easily realise their potential at work, even if the social infrastructural supports are in place.  This is a shocking waste of a scarce resource, even if, as economist and author Vicky Price pointed out in the Irish Times (Nov. 14^th 2019), ‘to achieve gender equality will require a mindset change which should benefit men too’.  

So, how are we to break the logjam?

The answer to this particular ‘wicked problem’ may come from the field of Consumer Behaviour.  Studies by Ehrenberg Bass demonstrate that Behaviour Change leads Attitude Change, not the other way around as suggested by conventional Consumer Behaviour theory.  So, Attitude Change will occur as ‘colleagues’ experience the benefits of greater gender balance in the work-place.  Spending years, and a small fortune, on attitude-shift messaging may bear fruit, but not for a long, long time.  By contrast, mandated Behaviour Change, in the form of gender quota-based work-place practices, will lead more quickly to Attitude Change than the other way around.  

Ultimately, cultural change comes but passing slow.

The question is around whether we create the right workplace and social conditions first or would it be better to impose the desired outcome in the first instance?

There is no attitude shift campaign that’s going to deliver results more quickly than a mandated, quota-based approach to gender equality. 

Women shouldn’t have to wait any longer for the opportunity to realise their ambitions and their potential in the world of work.  The law should say so. 

EC

No. Quotas are Cosmetic & Legislation will not have the Desired Effect

Sweet corporate culture! That hallowed ether from which the power suit, the 360 review, timesheets and meetings about meetings sprung.  Why anyone would want to change its time honoured traditions (Politics! Duplicity! Preferential parking!) is beyond me.  But here we are, exploring the premise that gender quotas will miraculously transform that which hath grown in the substrate of earnings calls and quarterly reports and net promotor scores. 

Before we get to the crux of why gender-based board level hiring quotas are comically misguided, it’s useful to call upon science and reference recent large-scale experiments and their apparent failures. 

Sometime after the Global Financial Crash of 2008, Norway—quite rightly deciding shit couldn’t get much worse—introduced legislation that required public companies to allocate 40% of board positions to women (or womyn or grrrl bosses, if you prefer) or face dissolution by the courts.  Lauded as a progressive move to redress the gender imbalance in the upper echelons of industry, Belgium, France and Italy followed suit with similar quotas, expecting that the move would improve the overall lot of women in the workplace.

Alas it did not. As the Economist reported, 10 years on the legislation proved to be ineffective with no bearing on the number of women participating at the senior or middle management levels, or indeed on the gender pay gap. 

What the quotas seem to have achieved, in Norway at least, was a reduction in the number of public companies subject to the legislation, falling from 452 in 2008 to 257 in 2013.  It’s unclear whether this was a result of forced dissolution or voluntary delisting, but what is clear is that a small coterie of individuals have and continue to sit on boards for numerous companies. Plus ça change!

To salt the wound, these quotas had no impact on corporate performance. Opportunities did not trickle down. Women did not suddenly see themselves in positions of power and aspire en masse to become titans of industry.  Corporate culture did not change.  The change, it seems, was entirely cosmetic.

Why?

Let’s look beyond the science at the good intentions inspiring corrective quotas.

In order to believe in the merits of gender-based hiring quotas, you first need to believe that gender is a poor determinant of intellectual ability and business acumen.

So far, so non-controversial.

Secondly, you need to believe is that some corrective mechanism must be imposed to inoculate against bias and inequality. 

This is where things get tricky.

By virtue of imposing a gender quota, you make the case that individual differences are of secondary importance to gender differences.

You effectively, if not unintentionally, act in favour of what you claim to be against: preferential treatment for accidents of birth.

Oops.

Putting aside for the moment that you do no favours for the woman you hire because she’s a woman (imagine trying to lead when your staff believes you were hired because of your gender), you’re using the poison for the cure. 

This sort of homeopathic thinking might not be dangerous if you’re trying to get rid of a wart, but if you’re sincerely trying to change culture by putting lipstick on a psychopath (as one in five CEOs reportedly are), then I’ve got some web banner ads to sell you. Two-wrongs-make-a-right has only ever worked out for the military industrial complex.

A handicap might make sense on the golf course where women’s driving distance is on average 75% of men’s, but success in the boardroom is a more nuanced matter that can’t be attributed to brute force, or addressed by the very discriminatory practices we claim to want to fix. 

While it would be easy to grab hold of low hanging bassinets and point to exorbitant child care costs to explain gender discrepancies in the C-suite, the root cause is far less sex-y than a battle between sexes.

Corporate culture has little to nothing to do with gender and everything to do a capitalist system predicated on the competitive pursuit of profit above all else, and the personality traits required and rewarded by such a system. 

While you’d be hard-pressed to find a C-suite job spec that read:  “Desired traits include Machiavellian tendencies wrapped in a veneer of civility and charm” these are precisely the attributes demanded by investors seeking alpha and hence, boards seeking the competence (not compassion) to deliver ROI. 

I’m not saying psychopathy inordinately favours men over women (even if science does).  What I am saying is that late capitalism cares not whether you’re a man or a woman—it simply needs those capable of putting profit before people in order to run.  The culture won’t change by increasing the number of ovaries in office.  It will only change by changing the OS.

In other words, the focus should not be on changing the players, but changing the game.

TV