In 2008 Norway obliged listed companies to reserve at least 40% of their director seats for women on pain of dissolution. In the following five years more than a dozen countries set similar quotas at 30% to 40%. In Belgium, France and Italy, too, firms that fail to comply can be fined, dissolved or banned from paying existing directors. Germany, Spain and the Netherlands prefer soft-law quotas, with no sanctions. Britain opted for guidelines.
In the USA, BlackRock is threatening to withhold votes for insufficiently diverse boards, as I've previously noted in this space. Back to The Economist for an explanation of why these trends aren't so great:
While quotas have not been the calamity that many had feared, they have also so far failed to achieve what governments had promised they would. When quotas are put on the table, proponents often produce “snapshot” studies showing that companies with more women on their boards have better returns and are less likely to be beset by fraud or shareholder battles. But causation is hard to prove. Perhaps better-managed companies have more scope to promote diversity. Equally, when studies are conducted before and after quotas are imposed, the results in terms of companies’ performance are inconclusive. Some studies find positive effects; others the opposite or no effect at all.
Neither is there evidence that having more women on boards is changing decision-making. In the experience of Lawton Fitt, a veteran female board member in America and Britain, women do not necessarily express particular views or fill a predictable role in the boardroom. A study in France in 2015 based on interviews with 24 board members concluded that the country’s new quota system led to changes in the process of boards’ decision-making. But there was no change in the substance of decisions, such as whether to approve lay-offs. It also found that the process did not change because the new members were women. It was because they were likely to be outsiders.
Perhaps the most puzzling shortcoming of the quotas is that they have had no discernible beneficial effect on women at lower levels of the corporate hierarchy.
