Shaheena Janjuha-Jivraj* explains why quotas alone can’t achieve gender balance in leadership.
The agenda for women on boards received a boost in June 2022 as the EU passed legislation setting quotas for women on boards.
The law requires listed companies across all twenty-seven countries to have 40 per cent female representation of women on boards or 33 per cent of executive and non-executive roles by the middle of 2026.
After a decade of mixed progress in this area, the legislation signals an ambitious commitment to building gender leadership in top companies across Europe.
Setting clear targets in timeframes is a firm commitment, and we know what gets measured gets done.
According to the European Institute for Gender Equality (EIGE), the average representation of women in boardrooms amongst the largest listed companies is 30.6 per cent.
Amongst these groups, France is at the highest level, with 45.3 per cent female representation on boards.
The introduction of gender-legislated quotas across Europe has been challenging.
Previously countries, including Germany and Greece, had stalled on this intervention.
The introduction of Quotas is usually always met with mixed reactions depending on how stringent the penalties are.
The EU has taken the softest approach without a penalty for missing the target.
However, successful companies will receive public praise, the carrot over the stick.
The introduction of Quotas is a powerful catalyst, highlighted by Anne-Gabrielle Heilbronner, President of the Women’s Forum and Member of the Directoire of Publicis Groupe, “France introduced quotas in 2011 and is now the European country with the highest female board participation.
Quotas are not ideal, but they have proven very effective.” Quotas are problematic for imposing recruitment decisions on leaders, leading to fierce debates around meritocracy and token gestures.
For quotas to be effective, they need to be part of a set of interventions addressing the barriers facing women achieving senior leadership roles.
They also need clear ramifications for failure to reach goals.
Quotas imposed on companies are a sensitive issue; at best, they are viewed as a catalyst for change.
At worst, they instil a culture of resentment and tokenism, undermining the calibre of women appointed into leadership roles.
Very few leaders want to be told how to recruit and build their leadership teams, causing further resentment towards the women appointed.
Recognising the sensitivities around this area, Monique Huet Independent Director Crédit Mutuel Arkéa, explains the power of quotas as a transitional tool; “Why are quotas necessary? Because they work, when organisations have incentives but no constraints due to gender imbalance, the progress towards parity is way too slow.
You need to create momentum and quickly reach the point where parity is normal.
Then quotas will not be felt like an ‘unfair advantage’ like they very understandably appear in the beginning.” For quotas to be effective, they need to be embedded with interventions that address inherent biases that impede the progression of women into senior leadership roles.
Quotas provide a first step in setting a clear target and building accountability, but this is only the first step.
Let’s consider the situation in the United Kingdom.
We can see the impact of an integrated approach that has matured over the last decade.
Following the Davies Report published in the UK in 2010, the ecosystem for women in leadership has developed with various stakeholders working together to create different solutions.
Activist groups, the Government, industry, and the public sector have had to work together and test ideas.
Initially, the target for women on boards and executive leadership was 30 per cent which focused attention.
Still, the shift could only occur with a nuanced understanding of the barriers facing women.
The first step was recognising that this was not about “fixing the women” and the dangers of treating women as a homogenous group at work.
Fiona Cannon, member of the FTSE Women Leaders Steering Group and Group Sustainable Business Director at Lloyds Banking Group, explains the approach; “The UK’s voluntary, business-led approach has required companies to take accountability at the very top of the organisation, set stretching goals and devise robust succession plans.
“This has resulted in significant progress, but we are now focused on ensuring this change is fully embedded, particularly at the Leadership team level.”
Addressing gender diversity in leadership requires careful attention to removing barriers to achieving goals.
A key component is to embed monitoring and accountability.
Cannon further explains, “When other countries introduced more formal legislation, largely through quotas, the UK adopted a voluntary approach, which has paid dividends.
“The voluntary, data-driven model meant that companies had to build a business case with specific targets, which were then monitored alongside other key business priorities.
“This has helped create a real appetite for change.”
The UK has made progress by breaking the glass ceiling among the FTSE 100 boards; in June 2022, 39.1 per cent of board positions are held by women, and 85 of FTSE 100 boards have met or exceeded the original target of 33 per cent women’s representation.
Almost half of the boards have 40 per cent or more female board members reported in the FTSE Women
Achieving gender-balanced leadership is not linear; we have seen progress wiped out with the change of a leader.
Gender diversity must start with leadership but become institutionalized and part of the organisation’s DNA to progress beyond leadership transition.
Therefore, quotas need to be recognised for their value to publicly listed companies.
Quotas provide the impetus to create board opportunities and strengthen the pipeline of female leaders.
Heilbronner, herself a board member, is clear on the value of board opportunities; “We have seen many women leaders emerge through their participation on boards.
“By giving women access to decision-making power, they refine their leadership and strategic-thinking skills.”
Inevitably the impact of quotas can also shake up the market with women who are already in leadership positions courted for appointment across multiple boards, the so-called golden skirts phenomenon.
As a tactic, this approach helps with numbers and visibility but it needs to be accompanied by conscious efforts to strengthen the pipeline and pull more women into leadership positions.
Getting into a leadership position is one step.
Ensuring the way is paved for women requires further deliberate and conscious effort, as explained by Huet; “I was fortunate enough to reach senior executive positions without feeling discriminated because of my gender.
“So it came as a shock to me when I realized that, when asked to identify top potentials in my teams, I came up with male-only lists.
“The teams were diverse enough, so something must have been wrong with how I looked at the subject!
“I promised myself I would at least identify one or two women every year.
“And it worked!
“If you look deeper and take the time to go beyond appearances, you find women with the potential to develop into leadership roles, in their way, at their own pace.”
Where does the change begin?
With leadership, walking the talk, not just having quotas thrust on them but also demonstrating a commitment to making change and internalizing accountability amongst their teams.
A powerful example of this commitment comes from Astra Zeneca, where fifty per cent of the company’s employee base is female.
Women hold just over 48 per cent of middle management and over 40 per cent of senior leadership roles.
Pascal Soriot, Chief Executive Officer of AstraZeneca PLC, emphasizes the importance of leadership commitment in bringing the benefits of diversity; “I believe that innovation only occurs when people feel safe to offer alternative perspectives when those ideas are welcomed and valued, and when challenging conventional thinking is part of everyday life.
“Creating an inclusive culture and building a diverse workforce is consequently a strategic priority for us.
“I chair our Global Inclusion & Diversity Council and oversee the delivery of our commitments.”
Quotas may force change, as a carrot or a stick, but they are only one step towards progress.
Successfully achieving goals requires a clear commitment from leaders to invest in tackling the culture through specific initiatives to support and hold their teams accountable for progress and rate of change.
Quotas alone are like throwing stones in a lake; they create ripples but don’t change the landscape.
*Shaheena Janjuha-Jivraj is an Associate Professor at HEC Paris in Doha. Her latest book Futureproof your career is available for pre-order.
This article first appeared at forbes.com.
