In past years government bodies have become louder and louder about women quota. An often-heard goal is to have ‘40% of boardroom members to be female’. The European Commission states in their definition of a quota:
The quota-instrument is a positive measure that establishes a fixed percentage or number for the representation of a specific category of persons.
To me, that sounds very suspicious – without any argumentation it is somehow deemed to be positive. Regardless, countries are following up. For instance, Germany is set to introduce legislation that will require German firms to allot 30 per cent of their non-executive board seats to women from 2016. But why? Why do we want 30% or 40%, or even 50% of boardroom members to be female? There can be 2 reasons:
- Having more women in boardrooms would be fairer
- Having more women in boardrooms would be better
I’ll give you a number of reasons why I think that women quota are a bad idea, because neither of the 2 reasons can be proven to be the case. I cannot think of 1 single reason why women quota are a good idea. Beforehand, I wish to emphasise that what I say refers to large numbers. That is, if I say that men may be better at X or may more often like X, it does not mean that every man is better at or likes X better, but that on average, across millions of people, man tend to be better at or like X better.
Having more women in boardrooms might not be fair
1. Guys like(d) it better
I think that men more often choose the corporate world because they like it better, in more or less the same way men like boxing, soccer or beer better. If men more often choose a corporate profession and are thus more present in the lower ranks, it only makes sense that they also travel up the corporate hierarchy steps in larger numbers, and that they thus have a larger representation in boardrooms. Also, people tend to be better at things they like to do. Importantly, things are changing already with more women entering financial and business studies. This is a recent trend, so it takes time (about a generation, I would say) for it to become visible in boardrooms. It is perfectly reasonable to believe that women representation in boardrooms will naturally increase in upcoming years, because they have only quite recently started joining the lower ranks with larger numbers. Quota would therefore be needlessly (and harmfully) distortive.
2. Guys might be better at the job
It cannot be ruled out that men on average are better CEO’s than women. I do not know whether this is true, but it might be the case. It might also be the case that women are better at it than men. We should allow for either possibility, and quota would prevent us from doing so. Also if in the future women prove to be better leaders!
3. Genetics: we cannot rule out that men are genetically better suited
I do not wish to argue that men are genetically better suited – for all I know, women might be genetically better suited – but we have to allow for the possibility that it is the case. Boardroom members need to be good at a multitude of things: taking action, exhibiting leadership, analytical reasoning, interacting socially, and so on, and so forth. A number of studies have shown that, for instance, brains of men and women are wired up differently which could explain some of the stereotypical differences in male and female behaviour. It would be nonsense to assume that these differences would have no influence whatsoever on the performance and effectiveness of boardroom members. Men and women are different in so many rich and colourful ways, and thankfully so – let’s please not overlook this.
4. Effect on women that do make it: ‘she only got it because of the quota’
Let’s say that quota are instituted and enforced. In a certain company a position opens up, and there are two candidates: a man and a woman. The European Commission gets what it wants, and convinces the company to choose the woman.
- This is unfair to the man, because he is punished at an individual level for something that is deemed important at a more aggregated level.
- It is also unfair to the woman, because many will claim that she got her position not on her own merit, but because she is a woman. This will undermine this woman’s credibility, therefore dramatically reducing her chances to be a successful leader.
- But the worst thing is, it will potentially undermine every woman’s credibility – who is to say whether she got her position based on merit or on gender?
5. Disgrace to women
The rhetoric in the arguments pleading for quota seems to picture women as weak individuals, who are bullied by men, who cannot take care of themselves, and who thus need help to get to the positions they want. I have an entirely different view. Many of my female colleagues but also friends are strong, resourceful, responsible, and leading characters. I find it condescending and a disgrace to them that ‘women need quota’. How is that fair?
6. Agreed upon at (supra-)national level, enforced at firm level
Quota are ‘agreed upon’ at an aggregated, national or sometimes even supranational level. But there is no single national or international firm in which it needs to be enforced – it’s enforced at the firm level. This can give very awkward, unfair situations in which a certain firm is forced to choose for a woman because other firms have more men in their top management. Alternatively, it may be decided that every firm needs to have at least 40% (or 30%, or whatever) female representation. It is very easy to imagine how this may sound ‘nice’ (to some) at an aggregated level, but how it is completely unfair to a certain firm with a relatively small board, where at a certain point (let’s say by a process of randomness) the good candidates happen to be male. Imagine a firm with 5 board members – are we going to force this firm to have 2 female board members, regardless qualifications? Or vice versa, when the 5 candidates are female? Having more women in boardrooms might not be better This list is a lot shorter than the one regarding fairness, foremost because anything that is unfair almost by definition can’t be better, which means that many of the mentioned point could (but will not) be reiterated.
1. Guys might be better at the job
As already argued, men MIGHT be better at whatever happens in boardrooms. I don’t think we can be sure now, but it might very well be possible.
2. Opportunity costs
If we enforce that women storm the boardroom ranks this may be harmful if better male candidates would have been available. But there is another potential cost: opportunity costs. In the situation that these women would not become board members, what would they have done? They might have become an invaluable member of parliament. Regardless individual situations, changing the dynamics of boardroom ‘elections’ is something we should not take lightly, because it could have major effects outside boardrooms as well.
3. Risk taking
Very often-heard: women are better risk takers. Or actually, they take less risk. Or whatever – they’re better with risks. Firstly, people, RISK IS NOT BY DEFINITION BAD. If the Wright brothers would have been less risky things may have looked a lot more difficult regarding your next holiday to Australia, to name one example. Some people (and other people as well) have the guts to conjecture something like the following:
Would the economic crisis have happened if women had been in charge – if instead of Lehman Brothers it has been Lehman Sisters?
This is very intoxicating, without any factual basis – and that by a Vice-President of the European Commission (which, for your information, is an institution specialising in taking away power from those who earned it by merit or by fair democratic elections, itself lacking any democratic accountability or legitimacy). Some factual investigations, on the contrary, even find that women bankers are linked to increased risk-taking. Thus… So, I find it very hard to support the case for enforcing more women in boardrooms. I wouldn’t care a bit if women would start to dominate boardrooms, but I do care that government bodies (without democratic legitimacy or accountability) call for quota because ‘it might be the right thing.’ To me, the absence of good arguments hints at jealousy. The discussion is geared towards feelings of good and bad – ‘women should not be discriminated against.’ Nobody would disagree, of course. But by focusing on boardrooms the arguments loses strength: why only boardrooms? By exactly the same lines I might ‘demand’ that 40% of garbage ‘men’ should be women, or that 40% of the lower ranks of financial organisations are comprised of women as well. Or that at least 40% of HR specialists should be male. No firm should be forced to pick the woman (or the man). They should pick the person that is the best choice for the job – regardless the gender.