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The Q Word by Caroline Simard, Vice President of Research and Executive Programs

I thought I’d write a bit about policy this week, since the State of the Union is the talk of the town and everyone is busy analyzing every presidential remark. Some would argue that the country is too busy fighting wars and economic crises, but I didn’t hear anything about gender equity last night being a part of the national agenda.  

I thought I’d write a bit about policy this week, since the State of the Union is the talk of the town and everyone is busy analyzing every presidential remark. Some would argue that the country is too busy fighting wars and economic crises, but I didn’t hear anything about gender equity last night being a part of the national agenda.

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I have written here and elsewhere that the representation of women at the highest ranks of companies isn’t increasing rapidly enough. The proportion of women on Board of Directors of Fortune 500 companies is dismal at 15.8% according to the most recent census by Catalyst. There has been no improvement on this front in years. In 2008, there were 12 women CEOs of Fortune 500 companies. The numbers are going down rather then up. Women still earn 77 cents on the dollar.

 

What would it take to drastically change this picture and not have it take a century?  Consider the following statistic: Norway has 44% women on boards. Surely, whatever this country is doing is paying off in terms of gender representation – what is this miracle intervention? The answer: policy. And the most controversial kind of policy, at that. Dare I say it? Quotas.

 

Norway’s proportion of women has gone from single digits to 44% in a few years, spurred by a law that was passed in 2002 giving companies until 2005 to reach parity in the board room (set at 40%). When companies failed to achieve this by 2005, the government of Norway gave them until 2008 to achieve the quota or face sanctions (a case study of the Norway example can be found here). This was not a process without controversy – even for a country that has a history of pushing the boundaries of progressive politics. Some predicted a complete meltdown of Norwegian companies, while others called this move decidedly anti-feminist, because it would keep women out of the meritocratic process and would amount to discrimination – putting them on boards because of their gender rather than their qualifications. Still, the sea change happened, and it turns out that the women who are now on the boards of these publicly traded Norwegian companies have equivalent qualifications as male directors – what was keeping them out of the boardroom in the first place was not, it turns out, a lack of qualifications.

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OK, but surely Norway is an anomaly? This couldn’t possibly work in other countries, right? I mean, this is the country of progressive politics, and, some would argue, “anti-business” policies. Some have called Obama a “socialist”, but I think Norway is more used to this label than are US politicians.

 

It turns out that the Norway example is being followed by unlikely countries in Europe. Quotas, like cooties, are contagious: Spain passed a similar law in 2007 in the wake of the Norwegian success, giving Spanish companies until 2015 to meet the quota. France followed suit in 2009 with submitting a proposed legislation to mandate 50/50 gender representation for public companies in France by 2015, and 40% within the next 4 years. Much like the Norwegian example, the controversy over there is raging.

 

If more countries follow suit, this European sea-change will change the face of global business in significant ways, eradicating the underrepresentation of women in board rooms in Europe.

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While I can’t wait to see how this new policy changes the face of business in Europe, I can’t imagine a similar law ever standing a chance in the US. The reason why I don’t think this will ever happen here has little to do with the controversy about women being picked for their gender as opposed to merit. As an organizational researcher, I know that it is not merit that is keeping US women out of the boardroom. Research repeatedly refutes the argument that if women only managed to meet the same achievement standards as men they would be recruited to these positions. There is no dearth of qualified women for board positions in the US. What is keeping them out is much more complicated than their resume – it’s a combination of social networks, unconscious bias and stereotyping, and a strong club effect at the upper levels of the corporate food chain.

 

The reason why I don’t think the US will ever pass such a law is that the US has a strong history of not wanting the government meddling in corporate life (with a good economic track record to show for it), and tends to be culturally opposed to sweeping government intervention to fix social problems. Have you checked the state of this new healthcare legislation lately? Enough said. Frankly, in the absence of legislation providing paid maternity leave, which one could consider a baby step down the policy road for gender equity, there is no way one can imagine quotas ever making the agenda of a US president. By the way, the US is the only industrialized country with no paid maternity/paternity leave, but that is a conversation for another blog post

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