In the Corporate World, Are Quotas the Answer?
Elvira A. M. Sihvola
A girl born in Norway today has a free and fair path ahead of her, at least in comparison to the majority of her foreign sisters. Her educational prospects are stellar, with women comprising over 65 percent of the students in tertiary education in the country. Like other Nordic nations, Norway routinely places in the top five for gender equity, according to the Global Gender Gap Report. Nonetheless, in 2004, the Norwegian government deemed it necessary to pass legislation requiring a 40 percent female representation on corporate boards.
The legislation might seem to enjoy some rational basis. Since the passage of the law, women now take up over 34 percent of Norwegian corporate board positions, with the number growing fast. By contrast, in America only about three percent of the corporate officers and less than 16 percent of the board members of Fortune 500 companies are female. Norway’s quotas have eased women’s access to positions of power and substantially increased the presence of women in both in boardrooms and corporate officer positions. The need for legislated corporate gender quotas even in progressive Norway would seem to prove that the professional world still remains characterized by persistent gender inequality. Yet though support for gender quotas in the corporate world has grown, however, it is questionable whether they are an effective or justified antidote to corporate gender inequality.
Quotas as Solution
In many developed countries, women obtain higher education in numbers equal to or greater than men. The larger number of women in higher education, however, has not translated to into equal representation in leading corporate positions. Laura Liswood, Secretary General of the Council of Women World Leaders, described the problem to the HPR as an “upgrade problem.” Women’s careers advance more slowly due to obstacles of “unconscious perceptions and stereotypes about leaders” and the “assumption of incompetence”. Unlike men, the dominant group for whom competence is assumed, women have to disprove an assumption of their inability in the workplace. By requiring increasing representation of women on boards, Liswood argues, quotas provide an opportunity for women to demonstrate their competence, and in the long run, potentially have a positive impact on improving attitudes towards female professionals.
Corporate quotas also have the potential to increase the visibility of women in business. In an interview with the HPR, Christl Kvam, a director of the Confederation of Norwegian Enterprise, noted the gender segregation present in the Norwegian workforce. According to Kvam, “two thirds of men with higher education work in the private sector and two thirds of women with higher education work in the public sector.” Kvam suggests that increasing the visibility and number of female role models in positions of power could encourage young women to pursue similar career paths, steering more females into the business sector.
Some skeptics note that the implementation of quotas undermines the credibility of the females on corporate boards by reducing them to ‘quota fillers.” A key argument for increasing the presence of women in organizational and executive positions is the concept of the diversity premium, namely the understanding that diverse teams perform better than homogenous ones. Quotas have also forced companies to extend the pool of possible board candidates to include previously neglected women and have also increased the overall quality of candidates. As Kvam asserts, the implementation of the quotas has induced Norwegian board election committees to begin “specifying what kind of qualifications are needed for board positions more systematically.”
The Trouble with Set-Asides
The debate about corporate gender quotas has expanded beyond Norway. Viviane Reding, the European Commissioner for Justice, recently suggested that the European Union could consider instating union-wide corporate quotas in 2011. In the United States, however, the idea of quotas is far less welcome. Liswood explained, “The United States has shown a remarkable resistance to quotas believing it unlevels the playing field.” She asserts that there is a widespread reluctance to admit that the playing field was never fair to begin with, since those with successful careers are often subtly advantaged, but unwilling to admit it. A strong argument against gender quotas, particularly in the United States, thus relies on the notion that governments should not interfere in corporate decisions.
For some, corporate quotas also represent a contradiction in terms. While the corporate quota attempts to reduce the importance of gender in the advancement of an individual’s career, the quota advantages women precisely because of their gender. In the United States, there persist a greater number of men considered to be qualified for management positions because of the overrepresentation of men in most MBA programs. If corporations are seeking the most qualified candidates, quotas may force corporations to select women that may be less credentialed relative to men and disadvantage more qualified men in the process.
Future Progress
While there is still a need to improve the status of women, the professional prospects for women have improved in the past few decades. Still, according to Iris Bonhet, professor at the Harvard Kennedy School, “the fraction of women in senior management, tenured professors in academia, women parliamentarians etc. seems to be stagnating around or slightly below 20 percent.” Nevertheless, Bonhet believes that we can expect progress in the near future due to five major developments: the wider recognition of the economic benefits of gender equality, employers’ legal and reputational concerns, changes in the values of both young men and women, wider academic and political attention given to the topic, as well as the successes of gender quotas in Norway and in certain European companies.
Further, it is likely that many of the arguments against quotas will continue to diminish over the coming decades. In 2010, substantially more women than men graduated from college, while the proportions of women to men in business schools shrunk to its lowest gap yet. Should the trend of female equality, or even female overrepresentation, in higher education persist, the dilemma between a qualified man and a less credentialed woman may prove a debate of the past.
Gender equality will require eliminating the obstacles that prevent women from advancing their careers while ensuring that both genders have equal opportunities for professional success. While there are some limitations, corporate gender quotas increase the visibility of women in leadership positions and empower younger girls to overcome the obstacles that their male counterparts may create. Liswood believes that “there is no glass ceiling, just a thick layer of men.”