Essec Business School

In the past, various approaches have been mobilised in order to encourage women to access upper-level management positions in firms[i]: Some of these initiatives have tried to ‘fix women’ through training, coaching and women’s networks, others have attempted to shift perspectives to value more ‘feminine’ styles of management and leadership as complementary and essential to firm performance[ii].  Meanwhile, legal frameworks have increasingly endorses equal opportunities at different levels of the organisation. 

Despite these initiatives, women remain scarce in the upper echelons of firms, on average constituting only ten to fifteen percent of corporate boards in Europe.

Several European countries have turned to gender quotas for corporate boards of publicly traded firms in order to push things forward: Norway – the European gender quota trailblazer – introduced their law in 2002 with the ambitious objective of attaining forty percent of women on corporate boards by 2008.  Other European countries implemented similar laws throughout the 2000s, including Holland, Spain and France.

On the surface, the results of these laws have been more or less encouraging: in the Norwegian case, for example, we see that in the ten years preceding the gender quota law, the percentage of women on corporate boards remained steady at five percent. Since the introduction of the law, that percentage has risen significantly, attaining the forty percent objective in 2010. However, while gender quota laws have a great potential for effectiveness, a critical analysis is necessary.

First, a lot depends on how the laws are implemented. In countries such as Holland and Spain where gender quotas for corporate boards were implemented in 2009 and 2007 respectively, the laws do not impose sanctions for non-compliance but simply requires justification on the part of firms that are non-compliant.  As a result, we’re just not seeing the same rate of progress as we did in Norway: Figures show that the number of women on Spanish boards has risen by only 2% since the introduction of the quota law[iii].  Similar trends are expected for Holland[iv].

Furthermore, when we look more carefully at the Norwegian case[v], we see that women corporate board members are more likely to hold multiple board membership positions compared to men.  This is a recent trend since the introduction of the gender quota law, thus indicating that one of the ways of increasingly female participation on corporate boards is through recruiting the same women across firms. Taking this into account, the overall impact of the Norwegian Gender Quota law on bringing in more women into positions of governance is actually less than the figures would suggest.

But perhaps most importantly, increases in women corporate board membership is all too often due to the recruitment of independent (i.e. non-executive) directors.  These independent profiles tend to be legal and political experts from outside the company - and since these women have no experience within the firm in question, their impact as role models for female colleagues is significantly reduced[vi]. 

If we assume that it is important to increase female representation in upper-level management and in governance structures not only to improve the quality of corporate governance and firm performance, but also to encourage women’s overall participation in the workplace and their career progression, we need to take into account the role modelling aspect of women on corporate boards. 

Men have a multitude of role models in upper-level positions to choose from in terms of designing their career paths. Women, on the other hand, have a much harder time identifying useful role models. The difficulty lies in finding role models who are accessible and whom women in middle management and entry-level positions can feel are similar to themselves.  To the extent that women on corporate boards have had similar career paths, share more personal values such as work-life balance, and are accessible so that there are possibilities for direct or indirect contact with them, they are more likely to fulfil role model requirements.  Meanwhile, the strong trend to recruit independent (non-executive) women board directors encourages neither accessibility nor similarity, and reduces the possibility for other women to see them as potential role models.  This leads us to the conclusion that the longer-term impact of more women on corporate boards due to gender quotas for working women generally is quite weak.

We can draw some tentative conclusions from this analysis: First, we see the importance of sanctions as a key element in implementing gender quota law.  But beyond this, we also need to pay particular attention to the type of women who are recruited onto corporate boards in order to ensure longer-term consequences for women in the workplace. Future generations of women need leaders to look up to.

In the ESSEC Leadership and Diversity Chair edited book on Diversity Quotas, Diverse Perspectives: The case of gender[vii], ESSEC professors Junko Takagi and Stefan Groschl invite academics working on gender issues in the workplace to discuss the principles and practices of gender quotas around the world.  In particular, there is a focus on the application and implications of gender quotas for corporate boards that have been introduced in several European countries including Norway and France.