Gender quotas on corporate boards have emerged as a popular tool for policymakers to promote gender equality in the workplace. The movement began in 2003 when Norway instituted a 40 percent quota for women on its country’s corporate boards. Spain, Finland, Iceland, France, Israel, Kenya, Italy, Belgium, Portugal, Germany, and Austria have followed suit with their own quotas. In March 2020, the European Commission announced it would attempt to reach a gender balance of 50 percent within its own management structure by the end of 2024. In 2018, California became the first U.S. state to mandate gender quotas for publicly traded companies incorporated in the state or risk facing heavy fines. But do these top-level initiatives produce substantive change, or are they merely symbolic?
What Happened When India Mandated Gender Diversity on Boards
New research found that while the policy did increase diversity, it didn’t necessarily change company cultures.
February 05, 2021
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Summary.
In recent research on diversity quotas in India, one of the first instances of an emerging market adopting gender quotas, the authors found that firms’ gender quotas represented a step in the right direction but did not go far enough. Firms which, at face value, seemed to be complying with gender quotas by appointing women on merit from outside the organization still “buffer” their existing activities through selective committee appointments, relegating the new female quota fillers to less consequential committees. For gender quotas to achieve their purpose as an internal corporate governance mechanism, corporate boards must embrace the appointment of well-qualified women who bring a valuable perspective to the board.