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Several studies (Merchant, 2011; Sabatier 2015; Terjesen et al. 2014), have

documented the underrepresentation of women on corporate boards, in Europe

alone they represent 56% of the workforce, yet only hold 11% of boardroom

seats in large companies (Sabatier, 2015). Moreover, they account for 45% of

university graduates, but only 14% of the directors of corporate boards in big

firms (Sabatier, 2015). From the statistics, it can be inferred that women are

under-represented despite their equal competence (Pande et al., 2011; 14,

European Commission, 2015).

Given the misrepresentation of women in board directorships, an increasing

amount of countries is currently introducing gender quotas. The gender quota

legislation is used to attain equal representation amongst sexes; the enacted

law takes a variety of forms, generally consisting of a set gender quota (33-

50%), a time frame (3-5 years) and penalties for non-compliance (Terjesen et

al., 2014). Its main purpose is to ensure the inclusion of women and promote

gender equality (www.quotaproject.org).

The success and efficacy of gender quotas as a measure to increase female

representation in firms is a controversial topic. Many consider the policy to be

effective, as it raises the number of women on boards, which consequently

leads to more diversity and improves financial performance (Terjesen and

Sealy, 2016; Sabatier 2015). Moreover, the policy has also been deemed

successful due to reports of increased levels of satisfaction amongst female

board members (Terjesen and Sealy 2016). Although these views have led

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many countries to adopt the gender quota legislation (Comi et al., 2016), there

is evidence that despite increasing women's representation on boards, quotas

are not an effective or successful way of promoting equity and empowering

women. This essay will demonstrate the problems associated with gender

quotas and ultimately prove their ineffectiveness towards achieving a gender

balance in corporate boardrooms as well as empowering women.

One of the main arguments in favour of gender quotas is that they bypass

discrimination by mandating that a certain number of positions be exclusive to

women (Pande et al., 2011). However, serious reservations can be raised

against this, according to Terjesen and Sealy (2016) quotas aim to prevent

unfairness but utilise discrimination to do so. It is important to point out that

affirmative action policies such as gender quotas are still discriminatory to those

who benefit from them. Quotas make it compulsory for companies to select

women based on their gender (Terjensen et al., 2014), this does women a

disservice. Just like men, women should be chosen because of their skills and

individual qualities; gender should not play a role at all (Terjensen, 2014).

Furthermore, quotas also signal tokenism (Merchant, 2011), because gender is

a part of the qualification criteria women's abilities are often downplayed as they

are thought to be less competent than their male counterparts (Palmer 2017).

Accordingly, this could discourage women and cause them to underinvest in

their career and leadership potential (Pande et al., 2011), which has a negative

influence on company performance (Merchant, 2011). A further argument

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against gender quotas is that although they aim to promote equality, men are

still ahead of women when it comes to perception (Pande et al., 2011). So long

as gender is a part of the qualification criteria the belief that the standards have

been lowered so that women could benefit from more opportunities will still exist

(Pande et al., 2011).

Supporters of gender quotas also claim that the legislation mandates firms to

obtain qualified female employees for the board leadership (Terjesen et al.,

2014), therefore altering the practices that exclude women from management

roles. However, research has shown that quotas have been anything but

successful. Despite enforcing the legislation companies around the world have

yet to fulfil their allocation of assuring fairness and balance in boardrooms

(Catalyst, 2008 as cited in Davidson, 2015). Furthermore, while most countries

did experience an increase in the number of females on boards, there was little

to no rise in the number of women in leadership positions; and gender

discrepancies between men and women's representation on board directorships

remain significant (European Institute For Gender Equality, 2017; European

Commission 2015; International Labour Organization, 2016). Additionally, in

Norway, where female representation increased more than anywhere in the

world; quotas proved to be unsuccessful in promoting equality for women;

having no significant effect on gender gap wages or women choosing to enter

the business world (Sanandaji, 2016).

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Advocates of gender quotas maintain that since the legislation forces firms to

acquire, promote, and retain female board members that are suitable for

leadership positions (Terjesen et al., 2014), it, therefore, ensures a more

qualified and diverse board (Sabatier, 2015). Consequently, this has been

shown to increase financial performance, strengthen a company's talent

pipeline and increase innovation (Catalyst, 2008; as cited in Davidson, 2015).

Nevertheless, the claim that quotas increase corporate performance lacks

substantial research. It has been clearly demonstrated that companies who

voluntarily hire female directors perform well, there is no indication that firms

who are forced to hire women due to quotas gain any benefits from it at all

(Alstoot, 2014;).

In addition, some studies have also shown that the implementation of gender

quotas had a neutral or negative effect on company performance (Sanandaji,

2016). Professors at the University of Michigan found that when forced to

increase the number of women on their boards by more than 10%, companies

saw one measure of their corporate value fall by 18% ( Dittmar and Ahern,

2012; as cited in Merchant, 2011). Another instance of this was in Norway,

where the introduction of gender quotas caused the management of firms to

deteriorate; this led scholars to conclude that the pressure of quotas caused

younger and therefore less experienced women to be promoted hastily.

(Merchant, 2011; Sanandaji, 2016). The benefits of having women in top

management roles depend on the qualifications of female directors. When

women are equally represented on board directorships because they excel, it

does indeed increase performance, not due to diversity, but excellence.

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The final argument against gender quotas is that they fail to acknowledge the

fact that there are many obstacles to female progression in the workplace that

cannot be solved by stipulating a quota. A study from the Institute of Leadership

and Management points out that 73% of women believe that barriers are

preventing them from achieving top management roles (ILM, 2011). Sanandaji

(2016), is certainly correct in saying that "public sector monopolies, high tax

wedges and welfare state policies such as generous parental leave, limit

women's opportunities in the marketplace and encourages them to work fewer

hours". There is no doubt that large welfare states initially thought to support

womens careers, are instead holding them back. High tax wedges make it

costly for women to acquire services that facilitate domestic work, which in

combination with generous benefit systems reduce economic incentives for

parents to work full-time, causing several women to work part-time (Sanandaji,

2016).

Moreover, the biggest attrition women in business face is when starting a family

(Parke, 2012). As mentioned by the International Labour Organization, mothers

earn less than women without dependent children (ILO, 2016), this is mainly

because they generally work fewer hours than colleagues who are not parents

(Dias et al., 2012). A further point is that due to the lack of flexibility associated

with management roles mothers usually choose to change their career, put it on

hold or give it up altogether (Parke, 2012). In agreement with Parke (2012),

women choose to abandon management roles for less "extreme positions or

more parent-friendly cultures." These are barriers quotas cannot fix. Therefore,

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it is essential for firms to identify them and develop policies to support women

through critical periods of transition.

In conclusion, it is evident that the arguments in favour of gender quotas are not

valid. On the contrary, considerable research has shown that they are

ineffective and unsuccessful in promoting equality and empowering women.

Gender quota policies are a sign of tokenism, which discourages women and

causes them to underinvest in their career and leadership potential, as one

study noted: some women on boards view their positions as being "women's

seats." (Merchant, 2011). Furthermore, quotas do not level the playing field for

females, as men are still ahead of women regarding perception and gender

discrepancies between men and women's representation on board directorships

remain significant (European Institute For Gender Equality, 2017). More

importantly, quotas have no significant effect on gender gap wages or women

choosing to enter the business world (Sanandaji, 2016). Another disadvantage

of gender quotas is that due to the pressure they exert on firms to promote

women, less experienced females are taking on leadership positions, which

negatively impacts company performance (Merchant, 2011; Sanandaji, 2016).

Finally, gender policies do not address some of the key barriers that affect

women's career progression the most, such as high tax wedges, welfare state

policies, and the lack of flexibility associated with balancing a career and family

life. Therefore, it can be seen that quotas are ineffective in achieving gender

equity and empowering women. Less invasive, more supportive initiatives would

be more successful for ensuring that women reach top roles without calling for a

quota (30%club, 2014).