Quotas not the answer to board diversity

WHEN IT comes to women on boards the question of quotas seems to be on everyone’s mind. Do we need quotas? Should we have quotas? What’s wrong with quotas? Most women I know who are board material (including me – I’ve sat on two charity boards and a commercial one) have strong feelings about these questions. Although some strongly believe that quotas are the only way of increasing the gender diversity of boards, most actually vehemently hate the idea of quotas. There are good reasons for this too. However, even those who are against quotas on matters of principle are reluctantly coming to grudgingly accept that they may indeed be the way forward on mostly pragmatic reasons.

So what’s so bad about quotas? The main reason successful and aspiring women argue strongly against them is that they are concerned that they would affect the legitimacy and image of women on boards. Every woman on every board would be open to the accusation that they were only placed there to satisfy a quota and their abilities would be explicitly or implicitly questioned. That would damage not only the current women and the boards they serve on but all the pipeline of rising and ambitious women.

These women would hesitate to be associated with a board position and open themselves to that sort of criticism. I know I wouldn’t and speaking to one of my students recently, she confessed to having had reservations about accepting a board position as the only woman for exactly that reason. Strong, confident woman that she is, she addressed the issue straight on and asked the Chairman directly whether he was inviting her to join the board as a token woman. She said she had a strong financial background and would scrutinise the company’s performance, and had a strong sense of fairness and responsibility and would be looking to see the company work harder at making a more positive impact on the world we live. She would not keep quiet and if he expected her to then she didn’t want the job. His response was clear: “I wouldn’t expect nor want you to and that’s exactly why we’re asking you to join us”. Now that’s the sort of chairman we need more of.

There are certainly enlightened chairmen and boards in the commercial as well as charity sectors and we’ve seen them reap the benefits. A study by the University of Illinois in 2009 illustrated how gender diversity is associated with increased sales revenue, more customers, and greater relative profits. So it does beg the question: why aren’t more company boards scrambling over themselves to attract women to their boards? Why is the proportion of women on boards barely at 21%? May be the evidence is not strong enough to convince others or the effort to change too great.

After all any change brings with it risk and uncertainty and in turbulent times we have a history of sticking with what we know regardless of the apparent reward. Another reason that seems to be heard more often these days, especially by recruiters and head hunters, is that there are simply not enough qualifies women. I personally have not done the research to count how many qualified women there are in Britain alone but looking around my circle of friends and networks, I can think of several extremely qualified, able and interested women who are neither on boards nor have been approached by anyone about it. Listening to Dame Sandra Dawson’s pod cast on Cambridge Judge Business School’s website, I heard that she too experiences the same phenomena. So we know that there are suitable women out there that are either not sufficiently visible or simply overlooked because they might not fit a mould or lens that recruiters use.

Although the pool of board material women is underutilized, it is also true that if all the boards started to recruit at the rate that is recommended and beyond, there would be a shortage of suitable women. That can be seen in the lower number of women in senior positions. Therefore it is imperative that companies not only seek to recruit more women to their boards but that they also separately and together endeavour to develop and support women into higher ranks and thereby creating a pipeline or pool of women who are capable and willing to participate fully on boards and dare I say even lead them. I’ll leave the leadership discussion for another time though.

Something needs to be done to get more women moving further up the corporate ladder. The alternative is to say that we’re in the 21st century and women have truly equal chances – they would achieve some much more and more frequently if only they were smarter and worked harder. From simply observing the women around me and the now hundreds of women who I’ve had the privilege to teach, I have seen no evidence that women are in general more stupid or lazier then men. Therefore, I believe that something else is going on. Now what the something else might be is a very interesting question in and of itself, and the more we understand about that the more companies will be able to move towards achieving their gender diversity targets at senior levels and on the boards, whether aspirational or imposed.

Indeed, outright discrimination in Britain is not common though statistics on that are hard to come by. I know many women who feel they’ve been discriminated against but that is only suspicions. I suspect what is really going on is far more subtle and complex. For example, the Academy of Management Journal (a top quality management journal), report in 2010 on a research was carried out in the US that evaluated the perceptions of senior managers of women who took the opportunity to benefit from courses on work-life balance. These women were immediately perceived as having a ‘problem’ and therefore less fit for senior management responsibility. Both men and women at senior levels shared these perceptions. Therefore, the problem is more deep rooted and needs to be address with some level of finess. The one thing we can clearly learn from that research is that singling women out for special training or support could seriously back fire. So, what can companies do to recruit from the currently able pool and to create more?

A few key things that companies could do quickly and easily:

1. Embrace truly diverse principles such that women are not particularly singled out, coupled with transparency in processes. Recruitment and promotion at all levels should be diverse, seeking valuable differences rather than similarities. The UK Corporate Governance Code should start to contribute positively to this with the new provisions to report on gender staring in October 2012.

2. Critically assess work policies for family friendliness. That is not only for women, though women typical suffer more from restrictive policies, but this enables the most qualified and able candidates to be attracted and retained. With increasing number of men taking on significant family responsibilities, this issue will become increasingly important or companies will start to lose the best people. There are already examples of excellent male candidates turning down jobs where flexibility for childcare was denied. Similarly, there is an increase number of women choosing entrepreneurship and they often cite flexibility and control as reasons for doing so.

3. Look to develop all promising candidates but not through one-size fits all type of courses or programmes. Recognizing that each employee has their own strengths and weaknesses and working with those enables women to get the support they need without seeming to be deficient in some way. Similarly, men too can get the support they need. Not every woman is the same, and not every man is the same – the more a programme can be tailored the better. One-to-one mentoring works particularly well to share knowledge, access networks and provide advocates and promoters (e.g.: ASX 200 Chairmen Mentoring Programme). What also works is access to blended learning material and a virtual learning environment, small facilitated groups, job rotations, sabbaticals, international assignments, special leadership assignments, to name but a few. All add to helping more women become board-ready, more quickly.

4. Actively seek and increase the visibility of high performing women – subtly. In some cases high achieving women are so visible that their first mistake is their complete downfall however, sometimes women are not sufficiently visible if they themselves do not seek attention. Consequently, they may be overlooked when the company puts forward candidates for the next level up.

5. Actively seek high performing women outside the company, the industry and even the profit sector. The non-for-profit sector can offer many highly skilled, smart and willing women with board experience that could bring a wealth of knowledge, experience and new insights to a commercial company.

Finally, the research on women-owned and led companies shows that women particularly start or join companies that they believe in. I’m certain that they also join boards of companies they believe in. So, may be companies could also consider what they stand for and what sort of person they attract as a result. Therefore to conclude, there may be insufficient women to meet future board demand but currently there are many women who are more than capable who are either overlooked, invisible or unwilling to take on a board position. Each of these three categories needs to be considered separately and steps taken to address the problem – and it is a problem. Which brings us back to the original question: to quota or not to quota? What do you think?

Dr Shima Barakat is a Research and Teaching Fellow at the Centre for Entrepreneurial Learning, Cambridge Judge Business School, University of Cambridge