A few weeks ago CV Harquail at Authentic Organizations drew my attention to this New York Times article about Norway’s policy requiring that 40% of corporate board members be women. On its face, the legislation seems like a good thing for women — I often say that getting more women into top corporate positions is one of the keys to improving life for women at all levels in the workplace. However, the idea of forcing companies to fill quotas each year doesn’t sit well with me.
Norway’s policy in particular seems naive. Even in large countries like the US, women haven’t had the same opportunities to gain corporate governance and management skills, so the talent pool remains limited. In the case of Norway, a relatively small country, the quota system has required companies to recruit women who may be less qualified than their male counterparts. A study on the policy from the University of Michigan suggests that corporate boards “grew younger and more inexperienced, [and] performance declined.”
The findings are something of a surprise since it has been de rigueur in the last year to claim that more women in positions of corporate authority would lead to better business. There have been any number of articles asking whether greater gender diversity could have mitigated the financial crisis (check out some examples here and here). Sylvia Ann Hewlett writes that there was “too much testosterone on Wall Street” in the Harvard Business Review, and Claire Shipman and Katty Kay of Womenomics fame talk about the financial advantages of having more women in top jobs in TIME Magazine.
If all of the hype about women being better managers is true, how come Norway’s policies haven’t improved corporate performance? Partly it’s the flawed notion that women are inherently — even biologically — more thoughtful and prudent than men. While some research is showing that diverse corporate boards do better, there’s no evidence that this is because of women’s involvement per se. It is more likely that a mix of opinions from a diversity of experienced professionals lead to success. Women are a part of this because there are many who are seasoned professionals. Their opinions are valuable because of their expertise, not their gender.
The idea that you can just recruit more women at the top is also flawed. While there are experienced female managers, they are many fewer than experienced male managers. The Times article points out that women in Norway get a whopping 48 weeks of paid parental leave, which often takes them out of the workforce for a year or more in the prime of their career. In the US the drawbacks for women in the workforce are less benevolent, but equally destructive — American women learn early that honoring family life while climbing the corporate ladder can be an insurmountable challenge.
I badly want to see more women in corporate boardrooms. But we set this endeavor up to fail if we don’t start by encouraging women in middle and upper middle management to stay in the workforce so they can be trained to fill these roles. Setting arbitrary quotas without providing the appropriate back-end education and support just means that we recruit unqualified people. Ultimately this isn’t good for business or women — business suffers from poor managers, women may be branded as less qualified even when they have all the right skills.
Glorifying women’s business sense based solely on their gender doesn’t serve the greater cause of equality; it just creates expectations that can’t be met based on where women are today. Our reality is that there are many fewer qualified female corporate leaders than male. But if we can get more women to major in business in college; pursue MBA programs; and get on-the-job management training that would give them comparable experience to men, we stand a much better chance of improving our corporate boards without imposing quotas that frustrate the very companies we most need to enlist as allies.
Related links:
- The Times article prompted this response from the right-wing National Review.
- Before the University of Michigan study was released, Kate Sweetman wrote this glowing report on the Norwegian policy in the Harvard Business Review.
- Nancy Clark at Women’s Lunch Talk cites statistics on women and corporate boards in the US. I don’t agree with all of her conclusions, but it’s interesting data.
- NPR reports on the Norway policy here.
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We’ll see the result of this experiment in a few years. This form of quota makes more sense for board members than employees. Board members are in good parts selected on who you know rather that what you know, that is what other companies the board member is board member of, and the argument has been that Norwegian board members were chosen from too shallow a pool.
If the pool of capable board members with good contacts and good governance skills haven’t increased fairly rapidly this would be a failed experiment.
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