2015 Trends: #6 Gender Diversity—Are Quotas the Answer?

We asked industry experts, colleagues and compliance officers what they believe will be the top issues impacting workplace ethics and corporate compliance programs in 2015. We gathered their best thinking and prepared our annual summary of trending issues and the steps you should consider taking as you plan for the coming year. We’ll share each of the trends here over the next few weeks.

In last year’s annual trends report, we suggested that perhaps a corner had been turned on perceptions about gender and corporate leadership. After all, we’d seen plenty of stories about newsmakers including Janet Yellin at the U.S. Federal Reserve, Christine Lagarde at the IMF, Mary Jo White at the SEC, as well as CEOs Mary Barra at GM, Meg Whitman at HP, Virginia Rometty at IBM, Patricia Woertz at ADM and Marissa Mayer at Yahoo.

While these stories were not always positive, the important point was that, for the most part, the stories were about these executives' policy decisions, experience, mistakes and achievements—and not about their gender. It was a subtle change, but one we thought might indicate more positive changes to come.

Unfortunately, if changes are coming, they’re coming all too slowly—despite the fact that research shows that organizations with women represented on the board and at senior management levels often yield higher results for stakeholders.

To address the disparity, a growing number of nations are creating quota systems and other measures to accelerate the number of women at the top of organizations. Norway was the first. In 2008, they introduced a 40% quota for female directors of listed companies. The penalty for non-compliance could be as severe as forcibly dissolving the company.

Following Norway, Malaysia, Brazil, Belgium, Iceland, Italy, the Netherlands and Spain have also imposed gender quotas for boards and the European Commission is considering imposing quotas across the E.U. Australia, Britain and Sweden have threatened to impose quotas if firms do not appoint more female directors voluntarily.

If this approach gains more traction, look for it to spark considerable debate. Advocates for quotas argue that it may be the best way to force change and that once the numbers increase, the public and stakeholders will become more comfortable with female leaders and any stigma that still exits will dissolve more quickly.

Opponents argue that quotas are anti-meritocratic and inevitably result in women leapfrogging over more qualified men resulting in a backlash against the process, suspicion of those who benefit and a culture and morale problem for all parties.

Chat with a solutions expert to learn how you can take your compliance program to the next level of maturity.

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