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In Europe, gender quotas are old news.
In 2003, Norway became the first country in the world to implement gender quotas on boards of directors, requiring listed companies to increase female members to account for at least 40% of the total number of directors. Other countries have followed suit, including Belgium, France and Italy.
But in the U.S., companies are reluctant to impose gender and diversity requirements on members, although representation still lags behind.
Margaret Wiersma, a management professor at the University of California, Irvine, said the reason for the hesitation is simple: Americans don’t like being told what to do.
“Europe is way ahead of us. It’s like we’re in the dark ages “At this point,” she said. “I think it has to do with mentality.”
progress stalled
A bill moving through the California Legislature could make the Golden State the first in the nation to impose gender quotas on corporate boards. California-based public companies will have until the end of next year to appoint at least one female board member or face penalties if Gov. Jerry Brown signs it into law.
“Unfortunately, they really need that push and prodding because obviously it’s necessary,” said Paula Loop, an assurance partner and Leader of PwC’s Center for Governance Insights. “You need to push and push these guys to get there, but once they get there, the results are overwhelmingly positive.”
In Norway, the country considers its laws a success. Women currently hold 40% of board seats, and overall diversity has increased as the pay gap among board members narrows.
As for the impact on financial performance and other measures of success, some experts say more time is needed to assess.
In the United States, however, the statistics are clear: While the majority of S&P 500 companies have at least one woman on their boards, only 25% have more than two women on their boards, according to a PwC study .
“I think we are out of step with the rest of the world and it would be great if we could make more progress on this,” Wiersema said. “After speaking to a lot of female CEOs, they couldn’t believe how little traction there was. In their view, it was unacceptable that we were at this level. Especially when you look at other countries. This is no longer just Scandinavia, Spain, Italy. The United States thinks we are better than these countries, but we are not.”
There is still progress
Opponents worry that quota pressure will promote promotion of unqualified female members to prestigious seats and may even discriminate against male candidates.
But there is no precedent for this, according to Ariane Hegewisch, director of the Employment and Incomes Program at the Institute for Women’s Policy Research.
“That absolutely didn’t happen,” she said. “There is no indication that this has happened and that it has made governance worse in any way… (but) there are studies showing that companies without women on their boards perform poorly.”
Yet simply appointing a woman to a board isn’t enough to make progress, said Alison M. Konrad, author of the 2006 study “Key Groups on Boards.” She said that because women are not yet represented on the board, some women are hesitant about becoming the first.
“They don’t want the shame of being a symbol,” Conrad said. “They want to be on boards because they have the ability to contribute. From their experience, this stigmatizing dynamic does occur. It’s hard enough being the first woman, not being the first Women who are labeled.” are there as a symbol. ”
CNN Business (New York) First published September 7, 2018: 11:42am ET