Why gender quotas for boards can be an effective tool in promoting balance

The Lord Davies report was published in early 2011 when women made up just 12.5% of FTSE 100 Boards. At the time, he set the goal of 25% female representation on Boards in the UK by 2015, and would reserve the right to impose gender quotas if progress couldn’t be made in that time. As of mid 2012, we have not reached just over 16%, though most of that growth is in Non-Executive Directorships, rather than on Executive Committee appointments. Still we are on the right track. Since the publication of the report, I have heard good arguments from men and women both for and against gender quotas – and feelings do not necessarily align with gender. I have heard women argue vociferously against them and men speak up in their favour.  As this is probably the most frequently asked question I’ve been asked in the last 18 months, I thought I’d share why I’m in favour of quotas if we can’t reach parity of our own volition.

Clearly, every woman and man would like to be awarded Board positions based on merit. This has largely fed the argument against them; that ‘giving’ women these positions will undermine their credibility with colleagues and diminish their sense of accomplishment. Women would rather feel like ‘I got there on my own’. While I completely empathise with this position; let’s not cut off our nose to spite our feminist face. We think women will ‘worry’ about why they were given a senior role or if they were advantaged because of their gender. However, Edward doesn’t wonder if he was given a ‘helping hand’ into senior roles because he does favours for John or routinely has drinks with Robert. Men don’t take time to question their promotions. Rather they assume what the women who are rewarded with these promotion must also assume; ‘I got it because I’m damn good!’ They are not handing out Board positions like sweets, if you are qualified enough to be offered one; you are qualified enough to excel. No Board is going to take a huge risk on an unqualified candidate simply because she is flavour of the month.  While gender based quotas are not popular as a solution, I thought I’d defend them on several grounds:

Here are my top 3 reasons why Quotas Can be a Useful Temporary Measure

  1. Women have historically been fed the line that if enough of us enter the workforce, then equal representation will ‘trickle up’. This is just not happening. Women have made up at least half of all university graduates in Western countries for the last 20 years and we are not reaching ‘the top’ in any greater numbers. Organisations can no longer say they are truly meritocratic if only the male half of their initial intake is making into senior ranks. Quotas may be the best temporary measure we need to introduce enough senior women into the most upper echelons. From here senior women can act as role models and affect the transformative culture change that 21st century organisations desperately need.
  2. Ironically, the presence of more women around a senior table allows any individual woman to be heard more as individuals. I, perhaps like you, have attended meetings where I was the only woman. When you speak as the only woman, its very easy for men to perceive your comment as ‘That’s the way women see it’ rather than “That’s they way Suzanne sees it.” Having more women around the table makes it easier for each woman to speak up, without feeling the pressure of being representative of her entire gender. One woman is a token, two is a conspiracy but three women paradoxically are seen as individuals. A quota would help ensure the ‘cheese’ does not have to stand alone.
  3. The presence of at least 3 women at Board level has been correlated with so many positive benefits ranging from higher profitability, increased reliability of financial reporting to more satisfied customers and employees. How does the mere presence of women affect these areas? Simple, by limiting group think which enhances corporate governance. Research shows women on Boards are more likely than their male colleagues to take notes,  do the reading and even attend Board meetings. They ask the ‘obvious’ questions that no one else asks. All this leads to more robust management practices and lowers the risk of group think. Women are not better Board members than men, but they bring different skills and it is these skills that will push organisations past the ‘business as usual’ model that must change.

Professional women lead on skills needed for businesses of future – capitalise on yours on May 10

A few years ago, at an event I attended on “Women in the Workplace” the male CEO of a blue-chip company made the joke: “Wouldn’t it just be easier if women were more like men?” His comment was met with a few polite laughs, but his attempt at humour gave away his own discomfort with the evolving demands of senior leaders. Sure, we might answer, it would probably be easier for him and a few others, if women were indeed more like men. And in fact, much of the advice around ‘getting to the top’ has resulted in many women feeling they have to adopt a masculine persona to succeed.  These women may not only feel inauthentic compared to who they were when they started their career, but acting as mini-men makes them dubious role models for both junior women and men who want to see a less ‘alpha’ way of doing leadership.

If the message is that you have to ultimately change who you are to get to the top – then how attractive is that senior position actually going to be? The greater loss if ‘women are more like men’ is that we lose out on the great skills women bring to the workplace. McKinsey research points out women are statistically better performers when it comes to three key behaviours: People Development, Clarity around Expectations and Rewards and Role Modelling. This is vital stuff! In fact, when they looked at the 9 behaviours that drive business success, men only outpaced women on two of the nine criteria: individualistic decision-making and control and corrective action.

It is far better for women to be effective as women – being authentic to who they are as individuals and the diversity that brings to decision making. Individuals thrive being authentic because they rely on inherent skills, not an adopted persona put on for work. Acting with integrity to raise the status of those around you without diminishing your own worth is key. Performance improves because impact improves. Interestingly, the future workplace favours many of the skills professional women already have in abundance, such as integrity, ability to think laterally and collaborative thinking.  And the best bit? Using these strengths is not just a way for working woman to tap into these ‘superpowers’ – it’s fantastic for those around them! Colleagues love it because they are suddenly working with someone they can trust and who validates their own strengths. Clients adore it because acting with authenticity means they are treated with respect and understanding, even within commercial parameters and constraints. Managers love it because communication flows much more easily and employee development suddenly becomes a positive experience for all.

If this female-friendly way of working – a way that doesn’t require women to apologise for their perceived faults and frailties sounds good to you, then join Female Breadwinners on May 10 as we pair with Deborah Frances-White and Dr. Anne Moir at Leicester Square Theatre to unleash the ‘superpower’ revolution.  To reserve places for yourself, colleagues and clients, visit the New Girls Network website.

The gender pay gap: how much is it worth to GDP?

Government must do all it can to close the gender pay gap. It appears that pay equality benefits not just women and families, but could also aid economic recovery in 2012 to make up a massive shortfall in Gross Domestic Product.

In a special report in the Economist on women’s rise in the workforce called “Closing the Gap”, the writer Barbara Beck explains:

“Perhaps surprisingly, there is little work on the macroeconomic effect of all the extra women who have entered the labour force over the past four decades, but McKinsey estimates that America’s GDP is now about 25% higher than it would have been without them.

Kevin Daly at Goldman Sachs, an investment bank, has calculated that eliminating the remaining gap between male and female employment rates could boost GDP in America by a total of 9%, in the euro zone by 13% and in Japan by as much as 16%.
Since not even the equality-conscious Nordics have yet managed to get rid of the employment gap altogether, it seems unlikely that gains on this scale will be realised in the foreseeable future, if ever, but there is certainly scope for improvement in some rich countries and even more in emerging markets. In the BRICs and other fast-growing developing countries the gap is already narrowing.”

On how the pay gap affects professional women, Beck continues:

“Despite sheaves of equal-pay legislation, women get paid less than men for comparable work. That is partly because they often work in different fields, and many of them are part-timers with lower hourly rates. But even in identical jobs they earn slightly less than men from the beginning, and as time goes by the gap gets ever bigger.

Across the OECD (Organisation for Economic Co-Operation and Development) it now averages 18%. That is a lot less than what it was 40 years ago, but in recent years it has stopped narrowing.”

I was dismayed to read this. Stopped narrowing? Surely improving economic growth is all the more reason to push for greater transparency around the pay gap.

Beck explains:

“the most vexing gap between the sexes is in pay. Almost all rich countries have laws, passed mostly in the 1970s, that are meant to ensure equal pay for equal work, and the gap did narrow noticeably for a while when women first started to flood into the labour market. In America, for instance, it has halved since 1970, from 40% to 20%. But most of those gains came in the early years and have tailed off. Across the OECD the difference in male and female median hourly earnings now averages around 18%, but with large and sometimes surprising variations.”

For example there are greater gaps in male-dominated sectors such as financial services where a greater proportion of pay is discretionary and ‘performance’ related – and less of a gap in the public sector, which adheres to greater transparency in pay scales.

The Chartered Management Institute polled over 34,000 executives in the private sector, and found that the average pay gap between men and women doing the same job from February 2010 to February 2011 was £10,031. The average female executive woman will be cheated out of £330,000 over her lifetime. Across the private and public sector, the Gender Pay Gap in the UK is 15.5% – slightly better than the OECD average, but certainly nothing to write home about.