Everyone loves the party game/icebreaker “two truths and a lie.”
Women are achieving great things in our country but for some activists, it’s not enough. California recently joined some European countries by installing corporate board gender quotas. Can you identify which of the following is NOT true about corporate board gender quotas?
A. Women are reaching leadership positions without the help of quotas
B. Increasing gender diversity on boards will increase firm profits
C. Quotas fail to recognize the real root of workplace disparities
A. True. While men still outnumber women on corporate boards, as women continue to work and gain experience and expertise, they will naturally reach boards on their own merit. In fact, data shows that this is already happening. From 2016 to 2019, the portion of corporate board seats occupied by women increased from 15 to 20 percent. Gender quotas only undermine the hard work that women are doing. Since the early 2000s, women have outpaced men in education, earning the majority of bachelor’s, master’s and doctorate degrees.
2019 was a big year for women. For the first time ever, women comprised the majority of the college-educated workforce. Women are making huge strides in business, with women’s wages growing faster than men’s, increasing numbers of women-owned firms, and more.
B. False. Proponents of gender quotas argue that increasing gender diversity on boards will increase firm profits. There’s no evidence that this is true. And think about it: If this were generally true, then firms would be driven by the profit motive to select diverse boards without a mandate. Advocates also claim that board quotas will have trickle-down effects through a company, increasing the number of women in senior leadership positions. There’s also no evidence that this is true.
Focusing on increasing gender diversity on boards is a disservice to both women and firms. Government-imposed quotas interfere with private business decisions in an inappropriate way. Gender quotas force firms to choose women over men for open seats by opening encouraging discrimination based on sex (against men). For the sake of their own self interest, firms should be free to select candidates they believe are most qualified and best suited for positions of leadership.
In Norway, a country that was on the forefront of implementing gender quotas, “stock prices plunged and firm values dropped as boards added less experienced female directors.” Focusing on gender diversity also hurts women, as gender quotas will only create an image of “token women” on boards, instead of allowing them to flourish in their current positions and rise through the ranks on their own.
C. True. Workplace disparities are complex. The choices that women make throughout their careers affect their trajectories. Just because some women prefer flexibility and prioritize their families doesn’t mean that those women are victims of discrimination. For the vast majority of women in the workplace, gender quotas on boards are worth nothing.
Corporations may think that they have fulfilled their duty to women by fulfilling the quota, instead of considering policies that would be far more meaningful and beneficial to more female employees, such as greater workplace flexibility, paid leave benefits, or higher wages. Most importantly, companies should give women the respect they deserve by responding to their individual preferences as they negotiate their jobs, promotions, and compensation for themselves without tokenism.
To learn more about the dangers posed by gender board quotas and alternative solutions to support women in the workplace, read IWF’s March Policy Focus here.