Female Boardroom Quotas are Wrong

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Quotas for female positions on corporate boards have been passed and are awaiting implementation for quite a few countries across Europe. Norway is the first one to impose a 40% quota to be met by 2015. France, Spain and Germany have similar laws, and European Parliament just finished voting last month favoring a similarly drafted law. These quotas are designed to rectify the extreme gender imbalance on corporate boards, which persists despite female advancements in education and workforce participation. In Europe, women make up only 12% of positions on boards in the top 300 European companies according to research by Russell Reynolds and the European Professional Women's Network1. Similarly, with only 16.1% of board positions held by women in U.S. Fortune 500 companies, debates about whether similar policy should be implemented in the U.S. arise as well2. Although mixed boards might make better decisions than monolithically male ones do, I believe that the quota system not only is a bad solution targeting a wrong problem, but also have potential drawbacks that could undermine the efficiency and quality of corporate governance. In this paper, I will first identify the underlying causes of the gender imbalance in the boardroom to explain why quota is not the right solution to the problem, and then examine the benefits and drawbacks of quotas to argue that quotas actually undermine value creation, thus shouldn’t be implemented in the U.S. and other countries.
I. Wrong solution targeting the wrong problem
The lack of women in corporate boardroom is only a symptom. It is a consequence of the huge underrepresentation of women at top executive levels. “Women account for 60% of new graduates in the EU, and enter many ...

... middle of paper ...

...g way to promote women. Mandatory quotas do more harm than good, but firms should make work more family-friendly.” The Economist. 21 Jul. 2011. Web.

6. Clark, Nicola. “Getting Women Into Boardrooms, by Law.” The New York Times. 27 Jan, 2010. Web

7. Joy, Lois, Nancy M. Carter, Harvey M. Wagner, and Sriram Narayanan. “The Bottom Line: Corporate Performance and Women's Representation on Boards.” Catalyst. The Chubb Corporation, 15 Oct. 2007. Web.

8. Sweigart, Anne. “Women on Board for Change: The Norway Model of Boardroom Quotas As a Tool For progress in the United States and Canada.” 32 Nw. J. Int’l L. & Bus. 81A. 2012

9. Chinwala, Yasmine. “Women Find Gender Is Still Barrier to Success.” FIN. News. Mar. 14, 2011

10. Kristula-Green, Noah. "Elite Schools Like Princeton Should Heed Bernanke on Merit."US News. U.S.News & World Report, 04 June 2013. Web. 06 Dec. 2013.

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