On this week’s episode, Charlotte Whelan joins to discuss whether women need quotas in order to achieve great things in corporate America. California and some European countries have installed corporate board gender qoutas, so we consider whether this practice leads to higher profits and/or actually helps women move up the economic ladder.
Charlotte recently joined IWF as a policy research assistant. She graduated from Princeton University with a degree in French and a certificate in Global Health. At Princeton, she was involved in a variety of activities including the James Madison Program and was the President of the Princeton Chapter of the Network of Enlightened Women.
TRANSCRIPT
Beverly:
Welcome to, She Thinks, a podcast where you’re allowed to think for yourself. I’m your host, Beverly Hallberg and on today’s episode, we discuss whether women need quotas in order to achieve great things in corporate America. With California recently joining some European countries by installing corporate board gender quotas, we are going to break down whether this practice leads to higher profits and whether they help women move up the economic ladder. Joining us to discuss the IWF policy focus for March is Charlotte Wehlan.
Charlotte recently joined IWF as a policy research assistant. She graduated from Princeton University with a degree in French and a certificate in global health. At Princeton, she was involved in a variety of activities including the James Madison program and was the president of the Princeton Chapter of the Network of Enlightened Women. Charlotte, not only a pleasure to have you on, She Thinks, but a pleasure to have you at IWF.
Charlotte:
Thank you. I’m happy to be here.
Beverly:
Now, I know you were in charge of writing up the IWF policy focus for March. As we just said, this is about gender quotas. I want to let everybody know if they’re interested in reading more about this, they can go to iwf.org to read it, but I first thought we would start with you breaking down what California has recently done, I believe it was in 2018, where they decided to add something to the law that they thought was supposed to help women. What did they add when it comes to gender quotas?
Charlotte:
Right. So California passed a law and this law requires that all publicly traded corporations who have their headquarters in California include at least one woman on a board of directors by the end of 2019 and then kind of with adding numbers as your progress to eventual kind of certain percentages for women based on the number of the size of the company.
Beverly:
And of course this is put in place because I would say there are at least good intentions behind it, whether or not it’s effective. We’re going to talk about that, but is that the case where you think there are good intentions behind this, but it often leads to unintended consequences?
Charlotte:
Absolutely. I think that these gender quotas are really just… People think that it’s unfair that corporate boards are old boys clubs and they’re trying to fix that problem, but I think they’re going about it in the wrong way.
Beverly:
Well, Charlotte, why don’t you start by breaking down the California law. What exactly was it trying to achieve?
Charlotte:
So this California law, basically trying to make sure that there are increased the numbers of women on the boards of directors in the companies in California. This law requires that all publicly traded corporations headquartered in California include at least one woman on the board of directors by the end of 2019 because it was enacted in 2018. Then the law also includes the plan to add more women to the boards in the following years kind of providing quotas depending on the size of each board.
Beverly:
These types of laws or these types of suggestions for laws if we have them elsewhere, usually are good intentions wanting women to be able to climb up the corporate ladder, but our women already doing that even without quotas?
Charlotte:
Absolutely. Women are doing incredible things on their own. I think that historically, women have been kept out just because men used to dominate the business world, but women have been climbing the corporate ladder on their own from just some stats, or a stat from 2016-2019, the women’s portion of corporate board seats increased from 15% to 20%. I don’t really think the California law had any real effect on that considering that’s across the United States and they only had a small number to start with. Women have just been doing incredible things and they don’t really need the special treatment.
Beverly:
And of course, another issue that is often brought up is women’s pay and the wage gap. IWF correctly talks about that as being a myth. Why don’t you break down the myths that we have associated with women when it comes to leadership incorporation. So you mentioned that they’re definitely increasing in those from boards and even women who are becoming CEOs. Why are we seeing the rise of women and why haven’t we seen it sooner?
Charlotte:
So I think that what it really comes down to is that women have kind of joined the business world later than men. For a long time, men did dominate the business world and women tended to stay at home while some work. So while now a number of years ago, women kind of started to… It became more regular and more common for women to be working and working full time. It still takes time for women to work their way up through companies. They need to kind of earn their positions and gain the expertise and that takes time. I think we’re just starting to see the effects.
Beverly:
Well even looking at some of the stats that you have, I think it’s fascinating and the policy focus, it talks about women now comprising the majority of college educated individuals, their wages are growing faster than men and between 2014 and 2019, the number of women owned firms increased quite a bit as well. I own my own business. So we’re seeing women make a lot of strides. As you were mentioning there, you were saying that we can expect to see these numbers continue to climb. What do you expect us to see in corporate America in the next 10 to 20 years?
Charlotte:
I think that some proponents of gender quotas would say that they need the quotas because that would… They say they’ll help firms to kind of increase the diversity, increase profitability because they have more diverse boards. I really just think that women are going to keep reaching these senior levels, especially if we have other policy that supports them, whether it’s family leave, trying to help them when they have children, and maternity leave or sick leave or really just trying to support them as they work through businesses and achieve these leadership positions.
Beverly:
You say that women don’t need these quotas to achieve success. Do you find that quotas like California has instituted actually tend to negatively impact women?
Charlotte:
I think they do it, especially in kind of how women are perceived, the women on boards are perceived. I think that what really happens is if you’re requiring that a certain number of board seats are to be filled by women, that’s first of all, discriminating against men because you’re saying that only women can have these seats and you’re also saying that women are only getting those seats because they are women. So if a woman’s completely qualified as a candidate for the position and received it, she’ll still be seen as only having received that position because they need to fill a quota.
Beverly:
What do you say to opponents of your perspective who say that the reason why we need these quotas is that there’s a lot of disparity today in the workplace, that we don’t see women climbing as much as men, especially in these higher positions and that this must be a result of sexism in the workplace? Do you find that there is sexism in the workplace and that there is at least some teeth to the accusation that we often hear?
Charlotte:
I’m sure that somewhere, that some companies and some organizations, yes there is some sexism, but I don’t really think that… Gender quotas aren’t the solution and I don’t think that the lower numbers of women in high positions or they maybe seem to climb the corporate ladder slower really are an effect of sexism. I think that it’s kind of similar to the so-called wage gap that women really make different choices in their careers. They’re not always interested in reaching those board positions, and often though they’re more interested in other higher pay or in flexibility. I think that women just make different choices and that shouldn’t be labeled as sexism. We should really fight for equal opportunity, but equal outcome is a much different thing.
Beverly:
You also talk about the importance of firms focusing on profit. I think some people in the service, they say, “No, that’s wrong. They shouldn’t focused on profit. They need to focus on things having a very diverse and inclusive environment for staff.” But why when affirm focuses on profit do you find it actually leads to a good workplace for everyone?
Charlotte:
Well, I think that if, first of all if firms aren’t focusing on profit, that’s going to be a big problem for all the shareholders. I think that if firms are focused on profit as they should be, that’s just going to produce a better environment. There’ll be more employees, the employees will receive benefits and women will kind of get the opportunities to work up through a company. If they can give really diverse viewpoints and that those really do add to firm profitability, then they’ll be added and they’ll make it because they’ll be showing the value they can add to a company.
Beverly:
So I want to circle back to the California law. I find it fascinating and it seems to be a lawsuit that has arisen because of the California law. What lawsuit is out there?
Charlotte:
Right. So there is a lawsuit, I think it is called [inaudible 00:10:06] I hope I pronounced that right. I have no Spanish training whatsoever. This is a shareholder of a California company, is challenging the constitutionality of California’s law because they’re arguing that it violates the equal protection clause, the 14th amendment by forcing companies to select board members based on facts fulfilling a number, a quota for women instead of just as individuals.
Beverly:
So pointing out that this could negatively impact males in the workplace, do you find that these quotas, I guess just numbers wise, it would definitely impact men in the workplace?
Charlotte:
Absolutely. I don’t think that all these companies, they want to be kind of, I don’t know, inclusive I guess is a good word or a popular word to use there. But at the same time, that’s not the point of these firms. The point of the firms is to make money and to add value for their shareholders. If these men aren’t being… If women are only added because of the quotas and not because they’re actually qualified, that will lead to inexperienced directors. It’ll hurt a firm’s profitability.
Beverly:
And final question for you, Charlotte. I’m curious if other states are looking at California and trying to implement quotas in their states as well and whether or not there’s any type of federal push?
Charlotte:
I think for now, only Illinois has a law that they’re considering. It started similarly to California’s, kind of mirroring the requirements, but now it’s been watered down to where they’re corporations to report the kind of gender balance on their boards and not actually implementing any quotas. I think some other states are also probably thinking about it, but I haven’t seen any laws or bills being drafted yet. Then on the federal level, luckily that is not being considered. [crosstalk 00:12:14]
Beverly:
Well, hopefully if people are reading your policy focus this month, they will not want to institute anymore quotas out there, but appreciate your work on this and coming on She Thinks to talk about it. Charlotte, thanks for joining us.
Charlotte:
Absolutely. My pleasure.
Beverly:
And thank you for joining us. I wanted to let you know that if you enjoyed this episode of She Thinks, we’d love it if you left us a rating or a review on iTunes, it does help and we’d love it if you shared this episode to let your friends know where they can find more She Thinks episodes. From all of us here at Independent Women’s Forum, thanks for listening.