There are few things in business so polarising in opposing views than introducing gender based quotas for boards – both private and public. The idea re-emerged in media commentary this past week, following Minister for Woman Julie Anne Genter’s appearance on TVNZ’s Q+A programme. The Minister suggested that a quota could be one tool used to reach the government’s target for 50 percent representation for women on state sector boards by 2021 (currently 46%).
There is generally agreement that diversity of any kind is better for business, because more diverse groups make better decisions. And since the main priority for a board is to make decisions, having balanced genders around the table is a good thing. The sticking point seems to be whether this is a voluntary target to be achieved over time or a mandatory quota with penalties for non-compliance.
As a bit of a brief introduction, the arguments ‘for’ gender based quotas can be summarised below.
Organic growth in female directors is too slow, and without introducing quotes it will be a very long journey to reach any targets – basically, quotas set goals which make things happen.
- Setting quotas signals that gender diversity is important and it keeps people focussed on making change.
- There are quotas and targets for a lot of things in business, why is one based on gender any different?
- In a political scenario, boards should represent the population and quotas based on gender (i.e., 50%) would ensure this happens.
- Gender quotas have been successfully implemented in many countries.
On the opposite side of the divide, are the arguments against the use of gender based quotas.
- Quotas lead to less qualified directors – with women chosen for their gender and not merit.
- Quotas are demeaning to people already on a board as well as new entrants and create an acrimonious culture.
- Quotas go against the principle of equal opportunity and are undemocratic.
- Quotas tend to promote essentialism, for example, saying women represent women, also means women cannot represent men.
- Boards who reach prescribed gender quotas often realise that they have not necessarily shifted the culture.
- Critical mass theory suggests that once you have reached 30% of any group, they are no longer perceived as a minority.
To add to the debate, is the performance of the private sector, which is far worse for gender diversity on boards with only 19% of women on NZX listed company boards. The NZX has included a recommendation in its corporate governance code for businesses to have a diversity policy, including the requirement for the board to set measurable objectives for achieving gender diversity and to report on progress. That’s a long way from a mandatory, enforceable quota system for gender balance on boards but it suggests that if real action and change is not achieved, then quotas are a possibility.
Whether it’s a target or quota, the other debate is what is a realistic goal i.e., what is actually achievable? There are many organisations that are taking gender diversity seriously and reducing unconscious bias to result in a more gender balanced talent pool during the recruitment process. At Decipher Group, we assist many boards and companies to achieve gender balance and this is certainly an increasing trend that we are seeing. There are many ways to encourage diversity within a business and we mentioned some of these in an earlier blog.
Ultimately, successful gender balancing is more than simply a focus on a statistic – it requires real organisational change at leadership level. And if fewer women than men choose to join boards for reasons other than lack of trying, then that’s fine too. Just remember, targets are simply a way of measuring progress, they are not drivers of change.
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The Decipher Team
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