Why Quotas For Women On Boards In The U.S. Wouldn’t Work

3:05 pm, November 28th | by Hillary Reinsberg

At this point, we don’t need to be convinced that having women represented on company boards is a good thing. But mandating quotas in the U.S.? It’s a bad idea.

Some background: as you may know, a number of European countries have instituted quotas mandating that the boards of publicly traded companies be populated by a certain percentage of women. Norway pioneered the idea and other countries, including Spain, the Netherlands, France, Iceland, Italy, Belgium and Malaysia, have followed suit. Overall, though the quotas have been met with some criticism, they’ve been a success thus far.

But should we adopt those quotas over here in the U.S.? Forbes columnist Lisa Quast gives an enthusiastic “yes!” says the whole world should follow suit. But we say, “no!” Have you considered that the U.S. and France aren’t the same place?

Quast is right in saying the quotas haven’t damaged the companies, and they’ve helped them become more balanced. And as we explained recently, the quota worked out well for France:

“France set a quota about a year ago that said that within six years, 40 percent of public board directors needed to be female, and 20 percent was required within three years. But within one year, they’ve already surpassed the 20 percent mark. Impressive.

[Side note: Forbes reports the U.S. number to be just under 15 percent, but that appears to be the figure for all companies, not just public ones. Either way, the U.S., without any mandates, seems to be doing a bit better than other countries even without the required push.]

But that’s in Europe (and Malaysia). It wouldn’t work here! First of all, the countries in Europe that have taken on these quotas are much, much smaller than the United States! They’re absolutely tiny in comparison. And, not to mention, their economies function totally differently. It doesn’t take an economist to tell you that. France, the biggest of the bunch, has less than 65 million people, compared with the 300 million-plus in the U.S. Norway, which pioneered the trend, has less than 5 million who call it home. It’s like comparing itty-bitty us and The Wall Street Journal: you wouldn’t solve problems the same way at the two places, and you certainly wouldn’t use the same management structure. Would you?

So, look: getting to 20 percent was doable and reasonable. Getting to 20 percent was playing catch-up. But once you get into forcing 40 percent of board members to be female, you’re forcing it. Yes, women make up half the population, but like it or not, they don’t make up half, or 40 percent, of executive positions.

By all means, we’d like them to! But getting women into positions of power needs to happen holistically. You can’t just endlessly force tons of women onto boards. Work on getting some more women in senior management first. One step at a time, here.

TAGS: female board quota | women in the boardroom