The number of women on corporate boards around the world remains regrettably small. Norway has the best record, according to a recent survey by Catalyst, with women taking up 36% of its board seats. Finland is second, with 30%, and France is third, with 29.7%. But in countries like Japan, where some women still call their husbands “master,” only 3% of board seats are occupied by women. In the U.S., women hold 19% of seats among the S&P 500 companies.
Are quotas a good way to boost those numbers? A new study commissioned by investment management firm BNY Mellon and run by Cambridge University professor Sucheta Nadkarni, finds that quotas can increase the number of women on boards but don’t ensure that women will stay. That is, turnover may prevent the total number of women on boards from substantially increasing. The study finds that the most effective way to increase their presence is one that’s much broader and tougher to achieve: building economic power for females as defined by the number of years girls go to school and the percentage of women in the workforce. There is one thing companies can do to help: Write governance codes that mention gender diversity as a goal.
“For me the striking and most encouraging finding is that empowering women and girls outside the boardroom is key to getting them into the boardroom—and staying there,” Helena Morrissey, chief executive of BNY Mellon subsidiary Newton Investment Management, told The New York Times.
The research was presented yesterday at a BNY Mellon-sponsored conference called Womenomics. It looked at data from 1,002 companies on the Forbes Global 2000 list, including businesses in 41 countries, over a time span of 2004-2013.
Aside from economic power, some other policies tend to increase the number of women on boards: Not surprisingly, long maternity leaves help a lot. The longer the leave, the higher the percentage of women who join boards and stay there. Also, more women participating in politics in a country correlates with more getting onto boards and staying.
Many Forbes readers will disagree with me, but I’ve long been in favor of quotas as a tool to right discrimination’s wrongs, at least when it comes to U.S. institutions like universities and boards. However, if quotas mean only that women join boards and then leave quickly, I need to rethink my position.
By Susan Adams