Professor Barnaldi Choudhury

Gender Diversity on Boards: Beyond Quotas

The idea of promoting more women to boards of directors has increasingly gained momentum. Nevertheless, change has not become imminent. In Germany, the number of women on boards is under 13 percent and more than half of the DAX-30 companies do not have any women on their executive boards. The German government has also recently rejected a proposal to introduce quotas to rectify this issue.

Given the aversion to quotas generally expressed by both businesses and governments alike, the purpose of this paper is to assess and propose alternative methods for increasing the number of women on boards, in line with topic (b).

This paper begins first, by examining the benefits of adding women to boards. In particular, it canvasses the arguments calling for a positive relationship between increasing the number of women on boards and increased profits. Given the equivocal empirical results of studies of this relationship, it proposes that this rationale be discarded from the debate. The paper then goes on to propose alternative rationales for justifying gender diversity.

In the next part, it focuses on the problems with the use of quotas, using Norway – a country which has successfully utilized quotas to increase the number of women on boards – as a case study. It then examines under what circumstances quotas would be appropriate for a state and argues that in most cases quotas undermine the rationales, posited earlier, which justify gender diversity on boards.

Finally, it looks to examine alternative methods to quotas for introducing change. By canvassing practices adopted by American football teams, Australian mentoring programs, and UK disclosure rules, as well as by examining existing workplace norms and practices which inhibit female labour participation, it proposes non-quota oriented changes for states hopeful of increasing gender diversity on their boards.