The European Union’s plans to enforce gender diversity quotas on boards are advancing, with calls in the European Parliament for EU-wide legislation to be put in place ensuring minimum female representation of at least 40%on supervisory boards by 2020.
Law firm Eversheds says that whilst plans to impose quotas are still some way off, there is a general acceptance that if member states/companies do not move to a more diverse board structure voluntarily, European legislators will enforce quotas in order to increase the pace of change and ensure greater female representation in listed companies across Europe.
Mark Spinner, partner at Eversheds, commented:
“Gender diversity is generally accepted as a good thing and there are now a number of reports which indicate that there is a positive correlation between greater female representation and company (share price) performance. However, once you look outside of political circles, support levels for the introduction of quotas are low, notably amongst corporates. Research undertaken for the Eversheds Board Report, in which directors were interviewed for their views on the topic, identified only one director who was definitely a supporter of quotas, although the majority were in favour of gender diversity.
“The vast majority of directors are concerned that the introduction of quotas will result in a move away from merit based selection in order to ensure delivery against arbitrary targets. The real issue for companies is ensuring that recruitment criteria which emphasise the importance of achieving the desirable balance of skills and attributes brought by a diverse board are properly set in place. One result of this would be a decreasing importance being placed on ‘previous experience,’ which would likely result in more female candidates coming under consideration.
I would make the point that the above comment by the Eversheds partner is one again the rhetoric surrounding much of the ‘diversity’ argument, with men from traditional sectors commenting about issues that they may be fully aware of. For example, there is research showing that women lawyers left their organisations because they were forced into admin duties (and therefore were not able to fully utilise their talents, or be noticed as such). In addition, my own research with financial services organisations, in interviews with top women bankers, showed that although they went along with the idea of meritocracy (ie. thinking their organisations promoted on the basis of merit), the evidence from interviews showed that their organisations practised discriminatory behaviour in many ways, and were not supportive of a culture that would support their progression. Both of these sectors are quite traditional, and ‘masculine’ (ie. legal and banking). So that we have a male partner commenting, and the comments made shows that within the popular press, the issues are just not understood. It is laudable that the partner has recommended the “decreasing importance being placed on ‘previous experience,’ which would likely result in more female candidates coming under consideration”, there are many, many more issues to consider and be understood. Mine and other research clearly shows this to be the case.