Women representation on corporate boards remains a problem in many countries around the world. Yet the introduction of quotas to address this issue has caused debates among current and future leaders.
Norway was the first country to introduce binding quotas for women on corporate boards back in 2003, and the initiative has been successful. But the recent passage of a law to enforce the women’s quota in Germany, after earlier efforts didn’t seem to lead to the intended consequences, has reignited debate about the pros and cons of quotas for women in the U.S. and Europe alike. “When women are not represented at the leadership table, then it’s hard for women to be represented as consumers of your brands,” says Robin Vogel, 56, vice president of global strategic sourcing at the American candy company Mars, Inc. Having majored in engineering at college, Vogel knows first-hand how underrepresented women are in certain fields. But throughout her career, she just pushed on. “Walking into a meeting room where the majority of the attendees are men may have impacts on a number of women,” she admits. “Frankly, I got used to it.”
Since 2015, every company that is listed on the German stock exchange must fill at least 30% of its supervisory board seats with women. Companies that don’t reach this goal have to give every seat that frees up to a woman. Right now, 100 companies in Germany are affected by the quota. And 3,500 more are obliged to provide data on how many women they plan to add to their boards. The percentage of women on supervisory boards at these listed companies has risen to 35.4% from just 25% back in 2015, according to Germany’s federal ministry for family affairs, senior citizens, women and youth. But privately held companies, which didn’t need to make changes back in 2015, have hardly changed their board composition at all. The vast majority of companies – 1,695 companies, representing roughly 81% – did not have any women on their boards in the last five years, according to ministry data. More than 78% of the companies stated that they didn’t establish a fixed number of women on their boards at all or didn’t give any seat to a woman. That’s why, as of August 2021, all publicly traded German companies with four or more board members must have at least one woman on their management boards as well. These new binding specifications are supposed to strengthen the women’s quota in Germany and to oblige companies to appoint women to management roles.
After 16 years in office, Angela Merkel, the first-ever female chancellor of Germany, is leaving office after German national elections in September. This new law, which is supposed to help women get into leadership roles, was one of Merkel’s final pushes while in office. Nine other countries have women’s quotas right now, and all of them are European. Norway was the first country to initiate a quota almost 20 years ago, followed by Iceland, Austria, Greece and Spain. For Norway, the quota has worked well. About 41% of all leading positions in business were filled by women in Norway 2019, according to Springer Professional, a digital library.
The United States may offer valuable lessons on alternative approaches to quotas. Only the state of California has established a women’s quota for big companies with more than five people sitting on the supervisory board. Darion Akins, Consul General of the United States for northern Germany, says gender quotas can do a lot of good if implemented well, while improperly implemented ones might do more harm than good.
“The approach with gender quotas in the U.S. is slightly different” than in Europe, Akins explains. Unlike Germany, the U.S. doesn’t regulate the overall percentage of women at the top of companies. Instead, U.S.-based companies tend to emphasize the individual. “When a company hires someone, we should look if the individual is qualified for this job,” Akins explains. “These people do not necessarily have to be women. We must judge people for their qualifications, talents, and capabilities, not their gender.” A supportive corporate atmosphere, also amongst colleagues, is just as important for the advancement of talent. “People should advocate each other’s talents,” Akins says. “In order to foster women’s positions in companies, a lot more men should be proactive and support women on their way up in their careers.”
If there were more of a dynamic in society encouraging women to strive for positions of power, it might be possible to strengthen women’s confidence to strive for leadership roles without the need for gender quotas. And that is precisely what concerns Vogel, the Mars executive. “What I worry about is women getting promoted [and becoming] the token woman,” Vogel says of quotas. “I do believe in setting goals for what you want … but I think there’s more that can be done.”
That’s why she stresses the importance of mentorship to encourage women to reach the highest leadership levels. U.S. companies, including Mars, provide Associate Resource Groups (ARG) to support women and other underrepresented groups. Vogel says she taps this group to mentor younger women. One aim of the women’s quota in Germany is to encourage girls still in their teens to strive for leading positions in the future. While many adults share the concerns voiced by Vogel and Akins, more than 80% of female students and more than 60% of male students at German universities are optimistic about the future effects of the women’s quota, according to a 2021 survey by Maastricht University and the online job board Studitemps. “The only thing I’m afraid of is that I might be seen as the ‘quota woman’,” says Laetitia Kitching, a 17-year-old student at Johanneum, a high school in Hamburg, Germany. “You always hear about it in theory, but I’ve never spoken to someone who has had actual experiences with the women’s quota.”
Addressing women on both sides of the Atlantic who want to achieve high leadership posts, Vogel gives three straightforward pieces of advice: “Have confidence in your talents. Know what you want and seek it,” she says. “And lastly, don’t strive for perfection.”
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