Gender Diversity on Boards: Beyond Quotas
16 Pages Posted: 27 May 2014 Last revised: 23 Jul 2015
Date Written: May 26, 2014
Worldwide there is a growing interest in increasing the number of women on boards. While quotas have been proposed in many countries as a way to address this problem, several countries, including, Germany have rejected this approach. Nevertheless, it is apparent that change is needed as women continue to represent minorities on boards of some of the largest companies.
Moreover, increasing the number of women on boards can be beneficial to firms. While it is not clear whether there is a positive relationship between increasing the number of women on boards and firm profitability, it is clearer that women make positive contributions to the board decision-making process. As a result, increasing the number of women on boards improves the quality of decisions made by the board.
Given the benefits increased numbers of women on boards can produce for companies and countries’ lacklustre interest in quotas, this article canvasses methods by which boards can increase female representation without relying on quotas. As such, it looks to practices adopted by American football teams, Australian mentoring programs, and U.K. disclosure rules. It also examines existing workplace norms and practices which inhibit female labour participation. In doing so, it proposes alternative approaches by which Germany, and other countries can increase gender diversity on boards.
Keywords: corporate governance, gender, diversity, board of directors, corporations, women
JEL Classification: K22, K10
Suggested Citation: Suggested Citation