Experience suggests that until companies are legally obliged to promote females to the boardroom, women will continue to be under-represented
A MALE chief executive walks into the boardroom and, without even raising his eyes, greets those present: “Gentlemen . . .”
The assumption that no ladies are present is not just a holdover from Mad Men, the TV series based on life in the 1960s Madison Avenue advertising agency world, but one that studies show remains rife in European business.
Ahead of today’s International Women’s Day, talk of introducing a women’s quota in the workplace is back on the agenda. European commissioner Viviane Reding fired the opening shot in Germany’s Die Welt this week.
“Personally, I am not a great fan of quotas,” she told the newspaper, “but I like the results they bring.”
A year ago she called for voluntary quotas to bring women’s boardroom representation to 30 per cent by 2015. Admitting progress so far has been “stubbornly slow”, the commissioner for justice, fundamental rights and citizenship has launched a three-month European debate on the issue. At the end of the summer, she warns, hearings and legislation could follow to impose quotas. “Where there are laws, progress follows,” she said.
The relevance of quotas has been underlined by a study into women in the workplace released this week by the Organisation for Economic Co-operation and Development (OECD). It finds just one in 10 directorships in listed companies in OECD countries are filled by women.
Ireland is below average, with 6.9 per cent – ahead of Canada, but behind Italy. Topping the survey are countries with binding quotas – Norway, Sweden and France (38, 19 and 18 per cent respectively).
A 2011 French quota law saw board representation for women jump from 12 to 22 per cent. The strictest measures are in place in Norway where, since 2003, companies can be wound up if the quota of women board members is below 40 per cent.
“The Norwegian example shows that legal quotas for gender-balanced representation on the boards of private companies are feasible and can have positive results,” says Serap Altinisk, policy officer with the European Women’s Lobby. “We are glad to see the European Commission considering a similar initiative at EU level.”
The lobby points out that Norway’s gender legislation “failed miserably to bring results” until the non-binding quota was made binding.
Besides equality issues, the European Commission says gender balance makes economic sense. It cites a recent McKinsey study showing gender-balanced companies have a 56 per cent higher operating profit than male-dominated companies.
Gender balance “has been shown to contribute to better business performance, improved competitiveness and economic gains”, notes the commission.
The OECD is more cautious in linking economic performance and gender balance, particularly at board level. “ it it is increasingly recognised that greater gender diversity in firms would increase the talent pool for top executives,” it says.
Quotas are a divisive issue among academics and experts, but perhaps the greatest hindrance to gender quotas is their divisive nature among women in power.
Christine Lagarde, former French economics minister and now head of the International Monetary Fund, says she dismissed the notion when she was younger, but now sees no contradiction between engineering gender balance and free market principles.
“If we’d had more Lehman Sisters than Lehman Brothers the world would be a different place,” she told Germany’s Internationale Politik magazine, citing research showing women are more cautious financial traders. “If quotas, introduced for a time, helped markets function again, then I’d be in favour.”
In one of the few European countries headed by a woman, Germany’s chancellor Angela Merkel has made clear she has no time for quotas. Yet the OECD reports that Germany, without a quota, is failing its women.
The country tops the wage discrimination table, with women earning on average 22 per cent less than their male colleagues over their working life. Just three per cent of boardroom positions are filled by women. Last month, German women journalists published an open letter pointing out that women made up just 2 per cent of newspaper editors and three of the 12 public television directors, and they demanded a 30 per cent quota.
They have the tacit backing of German labour minister Ursula von der Leyen, a working mother of seven. But her ambitions have been thwarted by Merkel, whose opposition to gender quotas, some observers say, is coloured by her East German background where it was expected, even demanded, that women work. Some see other reasons.
“I think you have to be careful with socialisation questions,” warns Carlotta Köster-Brons, head of the Association of German Businesswomen. “I think Dr Merkel’s opposition to quotas is more about avoiding confrontation with business than anything else.”
Köster-Brons predicts pressure from Reding will force EU leaders to move to binding targets.
Even Merkel will have to shift, the businesswomen’s association suggests. After all, she is a quota beneficiary, owing her start in politics to ex-chancellor Helmut Kohl’s need to fill the East German and women’s positions in his post-unification cabinet.