Global Summit of Women
Whenever International Women’s Day comes around in March globally and Women’s History Month is marked in the U.S., the late women’s rights activist and former Member of the U.S. Congress Bella Abzug would say: “First they gave us a day, and now we have a whole month. Maybe one of these days, they’ll give us a year!!” Laced with her typical humor and sarcasm, the remark underscored the irony of cramming salutes to women’s achievement for just a month or a day.
Well, much has been achieved – women college graduates now outnumber men in many countries, (Bilton, 2018) and women make up 30-50% of the paid labor force. (International Labour Organization, 2019) Women have broken through glass ceilings in different professions (Hess, 2018; Doyle, 2019; Gillett, 2019) and every major leap of progress for women – every ‘first’ — is chronicled in March celebrations around the world. However, there is also an understanding that despite these groundbreakers, the pace of change is much too slow and progress is slim at the top of the leadership pyramid whether in business or politics in every country.
The numbers that attest the long road ahead for women in the United States, are clear — just 5.2% of CEOs, 29% of senior executives (Catalyst, 2019), 28% of board directors in S&P500 companies (Papadopoulos, 2019)and in politics, only 23.7% of Congress and 18% of governors are women (Center for American Women and Politics, 2019) Despite a communal ‘tsk-tsk’ from business and government, incremental gains are the norm. In every report conducted by Corporate Women Directors International (CWDI) of the 200 largest companies in the world since 2004, the rate of progress in women-held board seats in U.S. companies averaged .5% yearly!! (CWDI Reports 2004-2018, n.d.)
Well, Europe came up with its own speed-up mechanism – quota laws that require 30-40% of board seats to be held by women starting with Norway in 2003 (Ekin, 2018) and most recently in Panama, (Women on Board of Directors in Panama, 2018) which announced its quota of 30% women directors in 2018. This strategy has leaped borders and now, 28 economies have some form of quota laws in place not just in Europe but in Malaysia, the UAE and India! (Peacock, 2012)
Here’s the good news – quotas are working. Italy made a leap from only 1.9% women-held board seats a few years ago to 34.8% in 2018 (Corporate Women Directors International, 2018) an unprecedented rate of increase spurred by a quota that mandated 33% women’s representation on boards in 2011. Outside of Norway the best European story comes out of France whose blue chip companies (CAC40) have not only reached the 40% target mandated by law, but many have surpassed it, like energy producer Engie, whose board is 50% female and whose CEO is also a woman. In CWDI’s decade-long study of the 200 largest companies, those based in countries with quotas averaged a higher percentage of women’s appointments to board seats at 33% compared to 17.1% in companies based in countries without legal mandates.
Quotas evoke a shudder among U.S. corporate leaders, and it’s a strategy not likely to be adopted here at the nationwide level. Often, the fear is that mandates will bring in unqualified and incompetents just to fulfill the required numbers. That has not been the case. Magda Bianco, an executive with Italy’s Central Bank, pointed out that board nominations in her country have now become more professionalize with male nominees subjected to the same scrutiny as the women being interviewed for board seats. Her prognosis – the inclusion of women will improve Italy’s corporate governance in the long run as directors are now selected outside of old boys’ networks. CWDI took a look at 113 women appointed to corporate boards in France between 2009-2011, the period when the quota was passed in both houses of Parliament, and it found that the overwhelming majority were senior executives and major entrepreneurs with impressive accomplishments.
Critics point out that quota laws have not produced more women CEOs and senior executives, or addressed the pay gap and work/life issues afflicting women workers. (Bertrand, 2018) Well, quotas were meant to increase the numbers of women directors only, and they are doing exactly that. Besides, so many laws were enacted only recently so it’s too soon to gauge their impact, whether on corporate governance or women workers’ status overall. Clearly, there is an implicit long-term hope that women on boards will have a trickle-down effect that will affect women workers positively and speed up women’s access to leadership roles.
Whether the quota laws to date realize the percentage required, there will be a far larger pool of experienced women board directors as a result, appointed in a far shorter period of time than in prior years. Quotas are a legal ‘door’ that women can now push open to allow many qualified women to be ‘found’ because a law now requires their presence in the corporate boardroom. These mandates, however, do not mean that companies curtail their work in developing a pipeline of talented women to reach top leadership. It’s not an either/or proposition but rather both are needed – quotas for the short-term and pipeline building for the long term.
I have spent over 30 years of my life advocating for women in leadership roles, and I am delighted that there’s now a legal accelerant that will move the numbers faster than the old belief in a supposed meritocracy that has left many qualified women behind for decades. Why the need for speed in creating diverse boards? There is now overwhelming evidence through over 70 reports and studies showing that diverse boards correlate with better corporate bottom lines. Are there other strategies to move more women into corporate leadership roles? Yes, there are, but quotas have proven to be the most effective. So, instead of just a day or a month celebrating women’s achievements, the late U.S. Congresswoman Abzug will now get years’ worth of women’s business leadership in a shorter period of time, maybe not here in the U.S. but in 28 other countries.
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Bilton, I. (2018, March 7). Women are outnumbering men at a record high in universities worldwide. Retrieved from SI News: https://www.studyinternational.com/news/recordhigh-numbers-women-outnumbering-men-university-globally/
Catalyst. (2019, August 13). Pyramid: Women in S&P 500 Companies. Retrieved from Catalyst Workplaces That Work For Women: https://www.catalyst.org/research/women-in-sp-500-companies/
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CWDI Reports 2004-2018. (n.d.). Retrieved from Globewomen: https://globewomen.org/CWDINet/index.php/research/
Doyle, A. (2019, May 20). High Paying Careers for Women. Retrieved from the balance careers: https://www.thebalancecareers.com/top-highest-paying-jobs-forwomen-2059666
Ekin, A. (2018, September 6). Quotas get more women on boards and stir change from within. Retrieved from Horizon The EU Research & Innovation Magazine: https://horizonmagazine.eu/article/quotas-get-more-women-boards-and-stir-change-within.html
Gillett, R. K. (2019, August 5). The 20 highest-paying jobs for women. Retrieved from Business Insider: https://www.businessinsider.com/highest-paying-jobs-forwomen-2015-10
Hess, A. (2018, August 29). The 15 best-paying jobs for women in 2018 . Retrieved from CNBC Make It: https://www.cnbc.com/2018/08/29/the-15-best-paying-jobs-for-womenin-2018.html
International Labour Organization, I. d. (2019, April). Labor force, female (% of total labor force). Retrieved from The World Bank Group: https://data.worldbank.org/indicator/SL.TLF.TOTL.FE.ZS?name_desc=fal
Papadopoulos, K. (2019, May 31). 2019 U.S. Board Diversity Trends. ISS Analytics. Retrieved from ISS: https://www.issgovernance.com/file/publications/ISS_US-BoardDiversity-Trends-2019.pdf
Peacock, L. (2012, December 9). Compulsory women on boards quotas for Dubai. Retrieved from The Telegraph: https://www.telegraph.co.uk/women/womens-business/9733465/Compulsory-women-on-boards-quotas-for-Dubai.html
Women on Board of Directors in Panama. (2018, February 8). Retrieved from denton munos: https://www.dentonsmunoz.com/en/insights/alerts/2018/february/7/women-onboard-of-directors-in-panama