According to the Sunday Times, the European Commission is drawing up a "voluntary" code fixing a minimum (30% by 2015, 40% by 2020) proportion of women on company boards. If enough firms don't sign up by the end of this year, the requirements will be made mandatory.
At present, women only account for around 12.5% of positions on FTSE-100 company boards. In only 15 of these companies are there any female executive directors: the great majority of female board members are non-execs.
Advocates of this proposal point to ubiquitous management consultancy McKinsey, which in 2007 published a study – in collaboration with a feminist pressure group – which is claimed to support the view that companies with women in the boardroom perform better than those without. However, a look at this piece of work reveals that it is methodologically crude, with inadequate statistical controls and taking correlation for causation. Even McKinsey admits that the evidence is suggestive rather than definitive.
As for the explanation of this apparent link, this seems to rely in part on particular insights which women alone can bring to boardroom discussions.
This may be more plausible in relation to some fields (fashion, healthcare, retailing?) than to others (construction?). Or it may be that women's presence leads to more consensual and constructive, less confrontational, discussions. Well, maybe both of these are possible, but they do seem to be suspiciously stereotypical views of gendered behaviour.
In Norway (not an EU member of course) a 40% quota has been in place since January 2008. It doesn't seem to have had any discernible overall impact on company performance one way or another. However it's worth noting that the expansion of female representation on Norwegian boards has been largely in non-executives. There are still very few women in top executive roles. The new board members have been disproportionately recruited from politics and the civil service, with many holding multiple directorships because of the dearth of suitable candidates. This is a pattern we could expect to see repeated in the UK. It is not clear what people with such backgrounds – women or men – bring to top companies engaged in competitive international markets. The cull of quangos has reduced opportunities for the female Great and Good, but as one door closes, another opens....
Interestingly, there has been a tendency for some top ASA (the Norwegian equivalent of PLC) firms to delist to avoid the legislation – a possibility also presumably open in the UK. Paradoxically, a Cranfield University report has noted, there appear to be more female top executive directors in unlisted Norwegian firms than in those covered by the regulation.
The imposition of this sort of quota in the UK would be yet another irritant to firms based in the UK. It probably wouldn't do a great deal of damage. But would it stop there? If women are underrepresented in boardrooms, so are many other groups “protected” under UK equality laws – ethnic and religious minorities, people with disabilities, the young, the old, the transgendered and so on. Quite where the line could be defensibly drawn on this is difficult to determine, but surely this way madness lies?