Women’s council seeks corporate gender quotas with penalties for non-compliance

The National Women's Council of Ireland (NWC) has called for mandatory gender quotas to apply to corporate boards, arguing that sanctions including financial penalties should be introduced to deal with those entities that fail to meet their quota.

In a new report, the representative group urges the Government to introduce a 40 per cent quota for gender balance on non-State boards to be implemented over a three-year period. It suggests that appropriate sanctions should be introduced in cases of non-compliance.

Among the sanctions proposed are financial penalties and denial of consideration for public subsidies or state contracts.

"Overall the path towards gender balanced representation on company boards is uneven, with elements of inertia and risks of backsliding in efforts made to deliver sustainable and durable gender balance," Dr Pauline Cullen says in her report.

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Quotas set a percentage for the selection of women, something that distinguishes them from targets or recommendations. In other jurisdictions, quotas are often coupled with sanctions for those companies that fail to comply.

Dr Cullen noted that despite progress having been made in the Republic, at the beginning of September last year there were still eight all male boards on Euronext Dublin. Of those, five appointed new directors in the past year, all of whom were men.

Targets v quotas

A Government-led initiative, Balance for Better Business, advocates for a target-led approach rather than quotas. But the NWC suggests targets are less successful when compared to the rate of progress when binding quotas are applied.

“Ireland’s reliance on a target-led approach has made gains moving from us from 17th to coming 11th in EU ranking as of April 2021. However, a slow and uneven rate of change across the EU19 means that EU averages signify a modest benchmark at best,” the report notes.

The case of Norway is instanced in the NWC report. There, a 40 per cent gender quota for public limited companies was introduced in 2003, with a grace period until 2008 to reach the target.

“Female representation had increased only gradually before 2003, but then jumped from 16 per cent in 2004, to 37 per cent in 2007, and finally reached the 40 per cent target in 2008, and 42.5 per cent in 2020.

“This progress reveals how legislative intervention mandating gender balance on boards is the most substantial measure to improve the representation of women on boards as compared to any action taken by any individual, firm or industry.”

Another critique of gender quotas is that they can fail to have a trickle down effect. But the NWC argues that quotas need to be introduced alongside other measures that accelerate women’s access to board seats.

“For example, French companies have tangible gains reflecting a quota of 40 per cent female directors, which has been in place since 2011, at the same time as a paid parental leave policy for both primary and secondary carer leave.”

Among the initiatives the council suggests the State could implement alongside quotas are supports such as mentoring, sponsorship and training programmes, and transparency in pay, hiring and promotions.