Ginka Toegel


YES, the Norwegian solution is a smart one.

The global financial crisis threw a lot of light onto the testosterone-fueled excesses of monocultural boards as captured by the now-famous suggestion that it might never have happened if Lehman Brothers had been Lehman Sisters.

Yet women's access to boardroom seats has hardly improved, particularly in the US and UK. In the FTSE 100, for example, 12.5 percent of directors are women, a tiny improvement on the 12.2 percent in 2009 and 11.7 percent the year before that.

The idea that there are not enough good or experienced women is a red herring. In reality, there are enough talented women - but finding them may require headhunters to look beyond their traditional male-dominated networks.

The reality is that boards continue to select in their own likeness. Over one-fifth of the companies in the FTSE 100 have no female directors and within the FTSE 250, more than half of firms have no female directors.

On some boards, the absence of women is shocking - especially given that they dictate over 80 percent of household purchasing decisions.

And the idea that women may struggle in harder-edged environments is another fallacy given the presence of women bosses in the likes of Areva (nuclear energy), AngloAmerican (mining), Archer Daniels Midland (agribusiness), DuPont (chemicals), Sunoco (oil) and Xerox (technology) - hardly touchy-feely organizations.

Quota systems can achieve a step change - and without claiming that they are a perfect solution, the evidence suggests that they are effective.

Initially, the introduction of 40 percent boardroom quotas for women in Norway created a considerable outcry against this "reverse discrimination" and "lack of meritocracy." There were dire predictions it would ruin the competitiveness of the economy, but these fears proved completely unfounded.

So far - no regrets. Three years later, even the most critical skeptics have to agree that it has been a success story. In 2010, the World Competitiveness Yearbook ranked Norway 7th - up 4 positions from the 2007 pre-quota period.

Indeed, the current proportion of women on Norwegian boards is actually 44 percent - 4 percent higher than the legal requirement, suggesting that it has been digested far quicker than expected.

Countries like France and Spain will follow suit and the EU is considering the introduction of quotas as well if things don't change substantially. Ironically, the very debate about quotas has the power to shift mindsets.

Of course, there are some problems associated with quotas, but these are temporary and can be easily overcome. For example, a few women were not initially "boardroom ready." But that lack of experience does not last long - and within two or three years, it becomes a non-issue.

Indeed, most chairmen and board members who have experience of having women on boards want to replicate it. Quotas create a few short-run problems, but they also allow a revolutionary breakthrough. So far, nothing else has worked.

Why not try the Norwegian solution, which seems to have surprised everyone with its simplicity and effectiveness.



(Ginka Toegel is the program director for the Strategies for Leadership program at IMD.)

Jean-Louis Barsoux

NO, quotas are a bad answer to the wrong problem.

Why the wrong problem? Because the lack of women on boards is a symptom.

It is actually the consequence of a deeper problem, namely the huge underrepresentation of women at top executive levels.

The proportion of women employees falls off dramatically at the higher reaches of the corporate hierarchy. And that is where the majority of future board members are recruited.

Norway, which pioneered the introduction of quotas for women by setting a minimum requirement of 40 percent back in 2003, has seen no corresponding improvement in the number of women in senior line management positions.

In other words, quotas have not impacted the root problem of helping women to climb the executive ladder.

In fact, such legislation may even deter ambitious women from taking on leading executive positions by offering them a direct route to non-executive positions.

Apart from targeting the wrong issue, quotas also generate problems of their own.

First, they risk alienating established board members - not just the men, but also the women who come up "the hard way."

It will be difficult for incoming women, no matter how deserving and talented, to earn the respect of people around the boardroom when their appointment is known to be quota driven.

In Norway, the new appointees were quickly dubbed "golden skirts." Such tags, with their connotations of entitlement, are difficult to shake off and are likely to disrupt board functioning.

Second, there is a real career risk for new appointees. These women will come in feeling that they cannot afford to make a wrong move, but at the same time desperate to prove their worth.

Mistakes are likely to happen as they overreach or spread themselves too thin --in Norway, some women board members hold more than 25 directorships and the average is four positions, twice the European average.

The performance of new appointees is under intense scrutiny - and should their opinions be either discounted or criticized, it will be a matter of interpretation whether this is legitimate or whether it is driven by resentment, perhaps even discrimination.

Law firms surely foresee future business. It is likely to be an uncomfortable time for many of those women - and there are bound to be casualties.

Some women are all too aware of the risks. For example, when UK prime minister David Cameron proposed diversity quotas for his shadow Cabinet, it was female politicians who felt uncomfortable about being seen as making up the numbers.

Quotas are a crude instrument with too many unintended consequences.

They actually divert attention from the multiple measures needed to fix the real problem, which is the challenge of retaining women and promoting them to influential line positions.

The necessary measures include policies to help balance work and family life, talent management (eg, mentoring) programs and specialized training geared to the specific challenges and concerns facing senior women executives.

Coercion and quotas do not solve the underlying problem. On the contrary, they let firms off the hook.



(Jean-Louis Barsoux is a research Fellow at IMD Business School)