Women on corporate boards: Sheer number increases can’t fix a company’s gender issues.

Corporate Board Quotas Don’t Work Because Women Still Get Sidelined When Decisions Get Made

Corporate Board Quotas Don’t Work Because Women Still Get Sidelined When Decisions Get Made

What women really think.
Jan. 13 2015 1:12 PM

The Deciders

Corporate board quotas haven’t helped solve gender problems because women still get sidelined when decisions are made.

boardmen.
Too often, women on boards are seen and not heard.

Photo illustration by Slate. Photo by Thinkstock.

There’s a persistent gender divide in the upper tier of most industries in the United States. The magic number seems to be just under 20 percent—that’s the percentage of women who are equity partners in law firms (17 percent), in Congress (18.7 percent), and on the boards of S&P 500 companies (19.2 percent). A new report from the research arm of Catalyst, a nonprofit devoted to expanding opportunities for women in business, compares the number of women on boards in the U.S. with the number of women on boards in several other countries, with the takeaway being that we’re failing here.

Jessica Grose Jessica Grose

Jessica Grose is a frequent Slate contributor and the author of the novel Sad Desk Salad. Follow her on Twitter.

The top three countries for women on boards are Norway, Finland, and France, where the percentage of female board members ranges from 29.7 percent to 35.5 percent. Not coincidentally, these three countries also all have government-mandated quotas for women on corporate boards. At least in sheer numbers, the quota system seems to be working. But, despite what the Catalyst report highlights, it looks like a greater number of women on boards hasn’t actually translated to big improvements for women working for those corporations. And that’s because focusing on executive-board bean counting is not enough.   

Norway is a great example of a place where a big increase in the number of women on boards did not mean big changes for the rank-and-file women in those companies. In 2003, the country was the first to introduce quotas for publicly traded companies. But because many Norwegian companies did not comply at first, in 2006 the law became more stringent: If a company’s board was not 40 percent female by 2008, the company would be dissolved. Though some companies changed their statuses to become private entities so they wouldn’t have to comply with the law, on paper, the law seemed like a success. The median proportion of female board members in 2003 was 0 percent, so the only way to go was up.

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But according to University of Chicago economist Marianne Bertrand, the benefits of the quotas have really only gone to the women who were made board members. In a 2014 paper, Breaking the Glass Ceiling?: The Effect of Board Quotas on Female Labor Market Outcomes in Norway, Bertrand and her co-authors found that the increase in women on boards made no real change in the gender wage gap or in female representation in top positions. As Christina Zander pointed out in the Wall Street Journal last year, “none of Norway’s 32 large-cap companies is run by a woman.” Zander also noted that there were many more female managers at privately listed companies—ones that didn’t have to comply with the quota—than at publicly listed ones.

So what explains the ineffectiveness of the board quotas? In a Sunday New York Times op-ed, Sheryl Sandberg and Adam Grant detail some recent studies on what happens when women try to speak up at work, and it’s not encouraging: Women are often interrupted and judged more harshly for sharing their thoughts. This idea is echoed in the work of Princeton University political scientist Tali Mendelberg, whose research may help explain why greater numbers alone don’t necessarily help women’s progress. Mendelberg’s 2014 book, The Silent Sex: Gender, Deliberation, and Institutions, which she co-wrote with Brigham Young University’s Christopher Karpowitz, describes their research into how it’s not the percentage of women in a group that measures female power—it’s how much they speak, and how much they’re heard.

In their study, Mendelberg and Karpowitz told participants, made up of students and community members, that they would be performing tasks to earn money. They arranged the participants in groups of five, and told them that the money each person in the group received would be based on a group deliberation. They didn’t know how much they would each be earning until after they decided how—if at all—the money should be distributed (earnings were based on the results of a spelling test). They were also told that their decision shouldn’t just apply to money in their group; it should also apply to society at large. Some groups were allowed to make a decision by a simple majority, and others needed to make the decision unanimously.

When the decisions needed just a majority, no matter what the proportion of women in the group was, women spoke less frequently than the women in the groups where decisions needed unanimous agreement. In a majority-rule situation, there needed to be more women than men in the group for a woman’s opinion to be more likely to win than a man’s opinion. And if there was only one woman in a majority-rule situation, her opinion was never the one that the group eventually went with.

“It’s that status that needs to change in order for women to gain power on a board,” Mendelberg told me over email. “If the board uses a competitive dynamic where the majority rules and the minority loses, then women need a majority on the board before they gain equal influence with men. Boards typically work that way—there is a formal vote, it is decided by majority rule, and the minority simply loses and gets none of its way. That operating procedure generates informal social norms within the board that profoundly shape the way people interact with each other during the discussion leading up to the vote.”

Majority rule, Mendelberg says, “sets in motion unwritten rules that promote individual agency and where the alpha dominates—a winner-take-all system of decision-making. In that atmosphere, women tend to be less likely than men to assert themselves: to speak, to advocate for their views, and to be recognized by other members as influential. They are also more likely to experience occasional but damaging negative interruptions while they speak.”

It may not be realistic to expect corporate boards to behave like juries, forcing everyone to agree unanimously before a decision is made. But Mendelberg mentions a few methods to make sure female board members are heard more than they currently are. “A board can do a great deal to elicit every person’s view and equalize the status of men and women during decision-making simply by beginning their meeting with the announcement that the group needs to hear from each individual, that every person here is valued and respected,” Mendelberg says. Another suggestion, made by Sandberg and Grant in that Times op-ed, is for boards to ban interruptions—of men, of women, of anyone. Mendelberg’s research has found that “settings that equalize women’s voice[s] also tilt the agenda towards talk of women’s distinctive concerns,” which include children and families. If changes are made to how boards operate so that women are heard, there may be a better chance that corporate policies toward women down the line will improve.

This isn’t to say that the raw number of women on boards doesn’t matter. There is research showing a connection between more women on boards and better performance overall. And companies with products to sell should have boards that reflect their customers, or else they could lose touch with whom they’re trying to serve. Additionally, just because quotas haven’t solved gender-equality problems in Norway doesn’t mean they can’t help in other countries where there are different cultural and business contexts. For example, there is some evidence, at least in the U.S., that more women on boards leads to more women in the executive pipeline. So it looks like we need both: a critical mass of women on boards and special attention paid by individual boards to make sure their female members get heard. As Catalyst’s Brande Stellings puts it, you have to look at advancing women’s equality in business “as a mosaic.” There’s not one solution; there are many solutions.