Women in the News: Germany Mandates Boardroom Gender Quotas

boardroom 2On Friday, Germany passed legislation requiring companies to increase the number of women holding boardroom seats to 30%.  Currently women hold 22% of boardroom seats in Germany.  Women in the U.S. hold only 15.5% of boardroom seats.  Several other countries in Europe have quotas in place that require companies to give boardroom positions to women, including Norway, Spain, Iceland, France, and the Netherlands.  The nature of these quotas differs by country.  For instance, Norway has a mandatory quota of 40% while the Netherlands has a non-binding target of 30%.

While this decision has been lauded “the greatest contribution to gender equality” since German women gained the right to vote, not all opinions of quotas are favorable, even those of gender equality advocates.  Most of the skepticism surrounding boardroom quotas centers around the belief that this measure is a shortcut to empowering women that will not target the structural issues and systematic biases that pervade the workplace and prevent women from advancing to leadership roles.  There is also a fear of tokenism and the perception that women with boardroom seats are unqualified and undeserving of those seats.  There is also a question of how far these quotas go in promoting gender equality.  For example, The Wall Street Journal examined the impact of Norway’s gender quota and reported that although companies have over 40% of women on boardroom seats, only 6% of the managers running these companies are women.  In addition, among large cap Nordic companies, only 3% are led by female CEOs versus 5% of Fortune 500 firms.  Boardroom quota advocates argue that it is an efficient way to facilitate a certain level of gender equality that would happen at a much slower pace if not enforced.  In addition, corporate boards with more females have been shown to outperform those with fewer females, according to a Catalyst study.  While the current number of women occupying boardroom seats is far from optimal, it is less clear what the best path to create gender equality is.

Regardless of the discourse surrounding boardroom quotas, it is certain that more women at some of the most powerful European firms will occupy boardroom seats in the near future.  The question of how the women who land boardroom seats will influence the business world will be exciting to explore!

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About cwib blog

Columbia Women in Business (CWIB) is an organization that strives to provide Columbia Business School women with resources and contacts to assist them in their academic, professional, and personal development. CWIB is committed to working with faculty, administrators, alumni and the greater business community to promote the role of and opportunities for women in business.
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