Sustainable Management Futures

Read the below extract by Erika Watson taken from the “The Guardian” (18 March 2012)
“Quotas aren’t the best way to get more women into boardrooms”
…A gender-equality policy that focuses on women at the top is unsustainable when most
women’s prospects are shrinking. The European justice commissioner is proposing mandatory
quotas for women in boardrooms if voluntary measures fail. Few people disagree these days
with the need for more women at the top of business and banking. Three-quarters of people
across Europe say they are in favour of laws to ensure gender balanced boards. And perhaps
buoyed by those findings, the European justice commissioner, Viviane Redding, is proposing
mandatory quotas if a voluntary approach doesn’t speed up. In the UK this is set against a
context of women losing jobs at a higher rate than men, and over 2 million low- to middle-income families facing tax credit cuts in this week’s budget. Strange times indeed: when
affirmative action is on the cards for those at the top, while equality is reined back for
everyone else.
Nevertheless, there are very good reasons for introducing boardroom gender quotas. There
are stacks of research that confirm that gender diversity on boards results in better corporate
performance on every measure, including finance. And there’s widespread agreement too that
male-dominated cultures in the top echelons of banking and business created ghettos of
groupthink and excessive risk taking. Those narrow cultures were at the heart of what went
wrong in the global financial crisis. The Swedish prime minister recently said: “A male
atmosphere creates more risk and a greater risk of corruption.”
Quotas have gradually increased female representation on boards in Norway from 9% in 2003
to over 40% today. And similar approaches are now being rolled out in other European
countries, including Belgium, France, Italy, the Netherlands and Spain. The issue is being
seriously debated in Germany. Legislation varies, but there’s a broadly common model of
gradually increasing targets, from 20% up to 40%. Corporate Britain, fairly united against
quotas, has heaved a sigh of relief this week. Voluntary efforts in the last year have resulted
in a new record high for female representation on the boards of the UK’s 100 largest listed
companies. The proportion has gone up from 12.5% last year to 15.6% this year. Experts say
that at that level of momentum, we could reach 30% in four years. We’ll see. If the increase is
not maintained, then, as David Cameron said recently, the case for quotas may be
unavoidable.
But while corporate Britain has pulled out the stops to get female non-executive directors on
to its boards, the proportion of women executive directors (female employees who sit on the
board) has crawled along from just 5.5% to 6.6%. Promotion prospects come at just the time
women start to have families. With expensive childcare, and few meaningful family-friendly
workplaces, few of those talented women last long enough to make it to the top. If quotas
are to work in the UK, we may need to borrow Norway’s childcare system as well. As it is,
childcare tax credits are being cut for around 500,000 families in a few weeks. And quotas
won’t work if they reflect and reinforce the growing chasm between top and bottom earners
in the UK today. The pay gap between the highest and lowest earners has reached an all-time
high. In the last year the pay of the lowest earners stood still or dropped, while the pay
of directors and chief executives increased by 15%. It may be impossible to justify a gender-equality policy that focuses on women at the top at the same time as the position and
prospects of most working women are shrinking. If we’re to change the culture on corporate
boards, quotas may be the worst option we have, except for all the others. But even then,
they need to go hand-in-hand with policies that support equal opportunities at work, at all
levels.
Task
Using the findings and recommendations of the Lord Davies Report argue the case for
affirmative action to introduce more women into the boardroom. Propose an action plan
for business to follow in order to encourage women to break through the glass ceiling.