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WiE Gender Equality in the Workplace: a Look at the Effectiveness of Quotas

For every man who works full-time, there is a woman who does not because of the many obstacles women face in the workplace. Longstanding cultural norms and workplace expectations have led to gender biases that leave women at a disadvantage in the workplace. While there is no question women are disadvantaged, understanding why such biases exist and how to address them is not so clear-cut.

WiE hosted a Zoom panel event on 14th May 2020 centred around why gender inequality arises in professional workplaces and what might be done to prevent it. The discussions highlighted some of the issues women face in industry environments, why discrimination occurs and what can be done to improve women’s standing in the workplace.

The panellists shared their personal experiences, research insights and ideas on how to effectively address the repeated challenges they all face. The online panel included four alumni from the Barcelona Graduate School of Economics (BGSE):

  • Carola Ebert (Macro ’16), manager at BearingPoint,

  • Hannah Pfarr (Macro ’16), supervision analyst at the European Central Bank,

  • Silvia Albrizio (Econ ’09), economist at the Banco de España, and

  • Tessy Vasquez (Econ ’11), technical coordinator for the Financial Stability and Development Network at the Inter-American Development Bank.

Panel Discussion Highlights

The main discussion points included identifying the most significant drivers of inequality, what actions can be taken to address unconscious biases, the effectiveness of a quota system in the professional world, and what can be done from an individual perspective to help further gender equality. The all-woman panel reached a consensus on how social norms on maternity leave impact women in the workplace, the need to be self-confident and the importance of role models and mentors.

While discussing the drivers of inequality, the panellists all agreed on the presence of unconscious bias in the workplace. Unconscious biases are learned stereotypes deeply ingrained in an individual’s mindset which either subversively influence that individual’s behaviour. Silvia Albrizio, a senior economist for the Bank of Spain, showed the prevalence of unconscious bias in the workplace by prompting the audience to “picture a CEO,” and then addressing that most people admit that they automatically picture a man.

The panellists also acknowledged the barriers that women face in the workplace due to childcare, referring to the effects of such barriers as the “child penalty”. Carola Ebert, a manager at BearingPoint, explained how the conventional path to success is viewed as working full-time and always being available which, for many women, is not realistic. Ebert argued the need for a cultural change and for men to set an example by actively taking paternity leave.

Quota Systems

Another topic of discussion was the place that quota systems can serve in the workplace. With the presence of unconscious bias, panellists debated whether quota systems are useful tools to help increase the representation of women in professional industries. The panellists generally believed that quota systems can be a helpful initiative in the short-term to boost participation. However, many had reservations about being known as a “quota woman” or about being perceived as someone who had received the position only because of a quota. Ultimately, the panellists felt quotas could be harmful to women’s acceptance in leadership roles and their own perceptions of dignity, worthiness and legitimacy within an organisation.

Over the past decade, quotas have been implemented throughout the EU to increase the number of women on the boards of public companies. Starting in 2008, Norway required publicly listed companies to have their boards composed of 40% women. Many countries followed suit and in 2012 the European Commission announced legislation to require publicly listed European companies to have 40% women on their non-executive boards or face a monetary fine.

As of today, the European Women on Boards (EWOB) 2019 Gender Diversity Index shows that women hold roughly 33% of board member seats throughout the EU. The index, which looks at 600 companies across the EU, shows that quotas have had a significant impact on improving the share of women on corporate boards. For example, an ISS Analytics report showed that, in Spain, the number of women in boardroom leadership roles increased from 10.6% in 2011 to 22% in 2018 and, in Belgium, the number of women increased from 10.8% in 2011 to 32% in 2018.

The Otherside to Quota Systems

However, there are some concerning realities behind these numbers. The Nordinc Labour Journal noted that, in Norway, the number of board seats fell by nearly 60% and the number of publicly-traded companies fell by roughly 55% from 2008 to 2013. While there could have been other factors, this suggests companies choose to maintain their male-dominated boards rather than follow the policy guidelines and incorporate more women.

Another unfortunate reality of quotas is that while the share of women in boards has grown significantly, there has not been a significant trickle-down effect for the share of women in upper-level management positions. According to the EWOB 2019 Gender Diversity Index, only 17% of executive staff, such as chief financial officers (CFOs) and chief operating officers (COOs), are women.

In fact, some of the countries with the highest percentage of women in the boardroom have the worst diversity in their executive staff. The study conducted by ISS analytics in 2018 found the average Board of Directors of a French public company was 43% women, whereas those same company’s Executive staff were only 4% women. Similarly, the average Swedish Board of Directors was 37% women, while the executive staff was a mere 2%. While boardroom diversity has improved over the past decade, the diversity amongst executive staff has seen no positive correlation, suggesting that more women on boards does not necessarily translate to greater diversity in leadership at other operational levels.

Additional Means for Encouraging Equality

The effects of board room policies suggest that quotas improve the diversity of representation in the position that they directly regulate, but are insufficient at improving equality throughout these companies (More research on this argument found here). In WiE’s panel discussion, Ebert mentioned her personal experience by explaining that “you don’t need quotas from the top if you have women pushing from the bottom”. It may be therefore beneficial for companies who want to improve their gender balance to consider bottom-up, junior level initiatives alongside top-down, senior level reforms.

The ISS Analytics study shows that internal company targets can be more effective than quotas for improving gender equality because it adds a layer of accountability amongst hiring managers without necessarily being a mandate. While quotas may be effective in increasing women’s representation in the short-term, encouraging women in entry-level positions and throughout their professional development may be the most sustainable course of action. It is a change at entry-level positions along with acknowledgement of the problem that will have a “trickle-up” effect for gender diversity in the workplace.

WiE would like to thank our expert panellists for their insights and the approximately hundred engaging participants who made this online discussion an insightful and beneficial event. We look forward to continuing this conversation at future events and in the comments below.

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