When gender quotas first emerged, a criticism that continually popped up was that companies would start to place women on boards just to check the box. It seemed that way until we saw significant improvement in the gender diversity and equality of different countries with gender quotas.
The first Global Gender, Diversity report, published by Altrata — and the third powered by BoardEx data report (2022) reveal that on average, countries with mandatory or voluntary quotas around gender have greater gender diversity on their boards. According to the reports, women account for 31% of board members in the nine countries that have such quotas, compared with 25.9% in the 11 countries without them.
Gender quotas are one of the most powerful tools to achieve gender equality in the business world. Norway was the first to introduce the concept. It required listed companies to have at least 40% female board members by 2008.
The best practice of gender quotas in EU countries is a great example to fight gender stereotypes, enhance gender equality and boost the talent pool.
- Germany, for example, introduced gender quotas for corporate boards in the private sector in 2016, resulting in an increase in the number of female board members.
- In October 2020, women made up 29.5% of the largest listed companies boards. Just within the past six months, this has reached an all-time high and increased by 0.8 percentage points.
- Over 45 % of France’s company board members are women. Around 38 % of board members in Belgium, Italy, and Sweden are women, while at least one-third in Denmark, Germany, the Netherlands, and Finland are women.
- Recently European Union states have agreed to a ‘landmark’ plan to set a 40% quota for women on corporate boards. All 27 nations of the EU will require non-executive boards to have 40 percent of the “underrepresented sex” – usually women.
We hope that the above facts on quotas help to highlight the importance of gender diversity in business and other sectors.
Quotas may not offer a complete solution to the issue, but they’re a step in the right direction.
We understand that the rate of gender diversity on corporate boards and leadership teams is increasing, but the pace of change is very slow. But then again we should not forget that the strength of a gender quota lies in its effectiveness, as the percentage of women in specific sectors is raised within a defined period. As more women enter into key positions across industries, it will become increasingly clear that gender equality is beneficial for all concerned
While quotas can increase the number of female executives in an organization, the challenge lies in maintaining a strong management structure. When evaluating potential directors, companies should take cultural barriers into consideration. This will lead to an increase in chemistry and productivity in the boardroom, as well as a sustainable model for long-term success.
Get in touch with the MERTIT500 for better gender data to identify which industries and companies have the highest levels of female participation on the Board, Management Team, and executive positions Management Team.