Diversity quotas: Do they help get more women in the boardroom?


Gender diversity quotas “can put an end to the ‘old boys’ networks” but they can’t be the end all, be all of diversity initiatives, argues Scotia Lockwood. What would do the job, then?

The latest diversity report by the Australian Institute of Company Directors (AICD) predicts that Australia is on track to hit the Institute’s target of 30 per cent female board members by the end of 2018, with gender equity on boards achievable by 2022. AICD believes that companies setting their own gender diversity quotas is more effective than if government bodies set the quotas; research conducted in Norway by Nima Sanandaji seems to back up AICD’s position.

In 2003, Norway introduced quotas requiring 40 per cent of board members of public companies to be women. In 2006 it was made mandatory for all companies. Sanandaji’s research found a neutral or negative effect for both women’s advancement and company performance where gender quotas where in place.

But can gender quotas be effective in achieving increased performance and the advancement of women?

According to the OECD, quotas are essential.

In an article on gender equity, they state that gender diversity quotas in the business world “can put an end to the ‘old boys’ networks to ensure that qualified women are no longer denied access to management positions because of their gender.”

Regardless of whether you are a supporter of gender diversity quotas, I think most people can agree that quotas are only a temporary solution. They might have some merit in taking us from the old world to the new world – where there is an equal representation of gender in senior roles and future appointments are based on merit. However, if we want real change then quotas are far from the only solution required.

Earlier this year, Westpac chief executive Brian Hartzer committed to having women make up 50 per cent of the bank’s leadership by next year.

But is this achievable when there are broader societal issues that affect women progressing to senior appointments?

Data from the Workplace Gender Equity Agency (WGEA) reports the most prevalent issue is the lack of accessible, affordable and flexible childcare in Australia. This prevents women being active economic agents, and having long and successful careers.

In fact, an OECD report from 2015 confirmed that Australia’s childcare costs were on average $14,089 per year, per child. Compare this to the Swedish model of ‘Educare’ (combines education and child care) – where costs are capped at a maximum of $200 per month, per child – and it is evident Australia still has a long way to go.

Where to from here for HR departments and companies?

Continue to support women returning to work through generous parental leave provisions and providing clear career paths for women following periods of parental leave.

Use HR metrics to monitor gender equity and identify internal barriers contributing to the prevention of women progressing within the company.

Lastly, analyse whether gender diversity quotas would be an effective strategy in your company to achieve gender equity and high performance.

Do you think diversity quotas work? Comment below.

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4 Comments On "Diversity quotas: Do they help get more women in the boardroom?"

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Dee
I agree with Dan. Being female, I would be offended to learn I was awarded a promotion/position only to find that I was compared to only half of my peers for the role; I was the best of a limited pool rather than the best of a full pool because the other half was men. I am in an executive role and have worked b***dy hard to get here but I have got here based on my merit and not because of/lack there of body parts. I have also been on the reverse end as a customer to a number… Read more »
Anne Barclay

Agree entirely with Sebastian’s note above. After 25 years I have come to the conclusion that targets or quotas are the only things that do work. There is a need to break through entrenched practices and networks and methods and targets and quotas work in ways which are entirely compatible with (and positively reinforce) merit principles.

Dan Erbacher

Quotas are a form of discrimination, which creates division, and undermines merit-based selection processes. It is time they are consigned to the bin

Sebastian Harvey

If merit-based selection is the answer to diversity, why do we still see such poor diversity results? Quotas are targets that can lead to action such as providing improved access to the workforce, development opportunities, inclusiveness programs and mentoring. These actions help create a level playing field for those under-represented in certain areas of the workforce, such as women in executive roles. It is only with this level playing field that merit-based selection actually works. Quotas and merit are complementary – not incompatible. Any divisiveness created by quotas comes from the ignorance of people about how they actually work.

More on HRM

Diversity quotas: Do they help get more women in the boardroom?


Gender diversity quotas “can put an end to the ‘old boys’ networks” but they can’t be the end all, be all of diversity initiatives, argues Scotia Lockwood. What would do the job, then?

The latest diversity report by the Australian Institute of Company Directors (AICD) predicts that Australia is on track to hit the Institute’s target of 30 per cent female board members by the end of 2018, with gender equity on boards achievable by 2022. AICD believes that companies setting their own gender diversity quotas is more effective than if government bodies set the quotas; research conducted in Norway by Nima Sanandaji seems to back up AICD’s position.

In 2003, Norway introduced quotas requiring 40 per cent of board members of public companies to be women. In 2006 it was made mandatory for all companies. Sanandaji’s research found a neutral or negative effect for both women’s advancement and company performance where gender quotas where in place.

But can gender quotas be effective in achieving increased performance and the advancement of women?

According to the OECD, quotas are essential.

In an article on gender equity, they state that gender diversity quotas in the business world “can put an end to the ‘old boys’ networks to ensure that qualified women are no longer denied access to management positions because of their gender.”

Regardless of whether you are a supporter of gender diversity quotas, I think most people can agree that quotas are only a temporary solution. They might have some merit in taking us from the old world to the new world – where there is an equal representation of gender in senior roles and future appointments are based on merit. However, if we want real change then quotas are far from the only solution required.

Earlier this year, Westpac chief executive Brian Hartzer committed to having women make up 50 per cent of the bank’s leadership by next year.

But is this achievable when there are broader societal issues that affect women progressing to senior appointments?

Data from the Workplace Gender Equity Agency (WGEA) reports the most prevalent issue is the lack of accessible, affordable and flexible childcare in Australia. This prevents women being active economic agents, and having long and successful careers.

In fact, an OECD report from 2015 confirmed that Australia’s childcare costs were on average $14,089 per year, per child. Compare this to the Swedish model of ‘Educare’ (combines education and child care) – where costs are capped at a maximum of $200 per month, per child – and it is evident Australia still has a long way to go.

Where to from here for HR departments and companies?

Continue to support women returning to work through generous parental leave provisions and providing clear career paths for women following periods of parental leave.

Use HR metrics to monitor gender equity and identify internal barriers contributing to the prevention of women progressing within the company.

Lastly, analyse whether gender diversity quotas would be an effective strategy in your company to achieve gender equity and high performance.

Do you think diversity quotas work? Comment below.

Leave a reply

4 Comments On "Diversity quotas: Do they help get more women in the boardroom?"

avatar
  Subscribe to receive comments  
Notify me of
Dee
I agree with Dan. Being female, I would be offended to learn I was awarded a promotion/position only to find that I was compared to only half of my peers for the role; I was the best of a limited pool rather than the best of a full pool because the other half was men. I am in an executive role and have worked b***dy hard to get here but I have got here based on my merit and not because of/lack there of body parts. I have also been on the reverse end as a customer to a number… Read more »
Anne Barclay

Agree entirely with Sebastian’s note above. After 25 years I have come to the conclusion that targets or quotas are the only things that do work. There is a need to break through entrenched practices and networks and methods and targets and quotas work in ways which are entirely compatible with (and positively reinforce) merit principles.

Dan Erbacher

Quotas are a form of discrimination, which creates division, and undermines merit-based selection processes. It is time they are consigned to the bin

Sebastian Harvey

If merit-based selection is the answer to diversity, why do we still see such poor diversity results? Quotas are targets that can lead to action such as providing improved access to the workforce, development opportunities, inclusiveness programs and mentoring. These actions help create a level playing field for those under-represented in certain areas of the workforce, such as women in executive roles. It is only with this level playing field that merit-based selection actually works. Quotas and merit are complementary – not incompatible. Any divisiveness created by quotas comes from the ignorance of people about how they actually work.

More on HRM