How to deal with board gender quotas

“IT’S LIKE smoking; ultimately only a hard intervention made people change,” says Jochem Overbosch, an executive recruiter in Amsterdam. As with bans on lighting up indoors, he says, so too with mandatory quotas for women on company boards, which the Dutch Parliament voted for this month after softer targets failed to move the needle much. Employers say they approve. Assuming all goes to plan, the Netherlands will join seven European countries (and California) in replacing the carrot of “please” with the stick of “or else” to increase gender diversity.

Will it make a difference? Quotas with consequences for firms—such as fines in Italy or delisting in Norway—have increased women’s boardroom presence. Firms with more women seem to work better, with higher attendance and tougher monitoring of management. But no discernible impact on company performance has been identified. And the hoped-for trickle-down effect—whereby more female board members would swell the ranks of female executives—has yet to materialise.

Still, quotas are here to stay. No country has lifted those put in place so far (though the Dutch insist theirs are temporary). Best practice is a work in progress, but some dos and don’ts are becoming clear. Formalising selection processes to avoid a shortlist of chairman’s chums, for example by hiring an external...

via Business Feeds

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