To quota or not to quota? That is the question.

June 19, 2019
Women on boards - article

Borderless Founding Partner and Managing Director Els De Cremer and Consultant Rosalie Harrison weigh in on the global debate about establishing quotas for female Board Members…

Norway, Germany and a number of other European countries have enacted quotas to ensure representation of women on Corporate Boards. And while these initiatives have their champions, the move has left some women and men in other countries questioning its objectives, motives and outcomes.

 Are you in favor of quotas?

Els:  I am not intrinsically in favor of quotas, but I am a realist.  Companies don’t change their ways — not easily. I started in HR in 1988.  If I take the broader topic of women in leadership positions, I see the glacial speed at which we are progressing.  I must think then that quotas do have a purpose.  It fixes attention to the issue and requires a result. I don’t think the result is perfect, but these problems of diversity are hardly ever discussed if companies are not forced. And Board quotas do force companies to also look not only at their Boards, but also at the underlying problem, that is, the pipelines within their own companies.

The first complaint that we hear is that there are no women.  I personally do not believe there are not enough women to fill the few Board places that we’re talking about, but it is true that you have to look harder for them and companies are not used to doing that.  So, I’m not a natural believer in quotas, but after having observed for so long that the score has not changed, I think they are necessary, at least in Europe.  I can’t talk about the U.S.  Perhaps Rosalie can do that.

Rosalie:   Yes, I have a bit of a different perspective coming from the States, but possibly not a different result.  In the US, successful women are generally not in favor of quotas for the fear that women will be seen as tokens. Perhaps this is a legitimate fear, but it is my sense that women in high positions are already seen as tokens and must always strive to prove otherwise.  So, I’m very glad that Europeans are taking a step forward on this issue, because it has created an awful lot of discussion, and American companies tend to respond to public opinion — especially their consumer base. The more discussion there is about this issue the better.

For me, the other benefit of mandatory quotas would be to put a spotlight on the selection process that takes place for all Board members. Board selection has historically been a very informal, “who do you know” old-boy system, which does not necessarily bring the most qualified people — regardless of gender.  If you are suddenly required to bring in a woman, you are most likely not going to be able to find her through those informal channels. This means companies are going to have to put in place a more sophisticated selection process and perhaps use outside third-party help to do so. In the end, I think this will increase the quality and capabilities of all Board members. I’d like to hope that adopting inclusive selection processes at the highest level can then maybe trickle down to a more thoughtful approach at the lower executive levels as well, but perhaps this is wishful thinking.

Let’s go deeper into that perception of tokenism. Isn’t that a big hindrance?

Els:  Quotas do not create the perception of tokenism any more than it already is today. You are still being seen as the token woman because in 2015 we still have to bloody well talk about the fact that there have to be women on Boards.  I think it’s actually shameful that in 2015 we are still talking about this issue.  If you’re on a Board with multiple men and you’re only one of one or two women, you will be looked at as the token dress. Tokenism is a problem for any minority regardless of quotas.

Rosalie:  I agree. I think a qualified woman, or any minority, who comes onto a leadership position can dispel the tokenism issue very quickly by being a high performer. So, for me, getting a seat at the table, and using a quota to do it, would not in any way inhibit me from joining that Board and proving, very quickly, that I’m not a token. I think any qualified person would do the same. I don’t really think that argument should be a hindrance against the use of quotas if the alternative is that women do not have a seat at the table.

Do you think Board quotas will lead to more diverse Senior Management teams?

Rosalie:  The studies have not shown in the countries that have done quotas that putting women on Boards radically changes the opportunities for women deep within the organization.  Just because you put a woman on a Board doesn’t mean she has the agenda, desire and capability to change the corporate culture and bring more diversity. Putting such an expectation on the shoulders of one female Board member is not realistic.

Els:  Exactly. Plus a Board has a function, as a Board, and it’s not the daily management of a company. If an organization wants to promote diversity within its management, it has to look at the entire picture, from attracting women to retaining women. I remember when years ago I resigned from my middle management position at a large multinational company. I had just had my first child, and my male manager said, “Yes, well of course, as a woman, you can’t have it all.” Then can you believe that this manager was eventually promoted to CEO? It’s no surprise that there’s not a single women on their Executive Committee even today!  Some companies give lip service to the topic, but at the end of the day, in order to change, you must actually change.

Rosalie:There is a famous quote that culture eats strategy for breakfast.  It is applicable here. There are many companies that create well-meaning strategies, but if they don’t change their culture, and promote and hire people who support that culture, the strategy won’t be implemented.  Some companies who are trying to get it right are even making sure that economic incentives are tied to building diverse teams.  To support diversity, companies will have to stop doing the same old things that they were doing before. This will include finding third-party partners like Borderless.  We think differently so we help our clients think differently.

Els:Yes, because our company is women owned and women led, we are conscientious and take a personal interest in furthering the careers of women, even if it’s one hire at a time.

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