Workplace Issues

Quotas Aren’t Best Way to Get Women on Boards: Study

More than quotas, a greater indicator of women's participation and longevity on boards reportedly is a nation’s “female economic power.”
Katie Kuehner-HebertApril 8, 2015

The use of quotas isn’t the most effective way to get more women to participate – and remain — on corporate boards, according to research presented Wednesday at BNY Mellon’s Womenomics conference and reported in The New York Times/Deal Book.

More than quotas, greater indicators of women’s participation and longevity on boards are a nation’s “female economic power,” which includes how much schooling for girls was expected and the percentage of women in the workforce, and stated gender diversity goals within corporate governance codes, according to research conducted by Cambridge University professor Sucheta Nadkarni and commissioned by BNY, The Times reported.

Ranked highest in female economic power were Australia, Norway, and Denmark, with the United States ranking sixth and Britain ninth, according to the study, which is based on data collected from 1,002 companies in 41 countries and looks at statistics from 2004 to 2013.

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“For me the striking and most encouraging finding is that empowering women and girls outside the boardroom is key to getting them into the boardroom — and staying there,” Helena Morrissey, chief executive of BNY’s Newton Investment Management reportedly said at the conference.

Companies can increase women’s participation and longevity on boards if they allow “substantial” maternity leave and if they recruit women politicians, who tend to stay longer on corporate boards, according to the research. The degree to which a country stresses gender equality helps increase women’s participation, but not necessarily longevity on boards.

“In more assertive cultures like Greece and the United States, fewer women were named to boards, but they stayed there longer,” The Times wrote. “The research, to some extent, raised other issues. What keeps women on boards? Does longevity translate to effectiveness, and what is effectiveness?”

“This opens a lot of questions,” Nadkarni told the newspaper.

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