'Behind Every Great Woman Is an Effective Quota System' - Is This the Future of Women in the Boardroom?

Businesses clearly have a long way to go before there is equality in the boardroom. But market forces rather than quotas are a large part of the answer.

Another day, another demand for female quotas. From the boardroom to the cabinet, the call for women to be given a professional leg-up seems to be gathering momentum. First there was Fiona Hotston Moore's well-articulated argument for David Cameron to introduce temporary quotas for women in top posts in politics and the civil service. Not to be left out, Labour "could" introduce quotas for women (and ethnic minorities) to address inequalities within boardrooms, according to shadow business secretary Chuka Umunna. Interestingly both Hotston-Moore and Umunna's comments follow publication of a study by recruitment consultancy Green Park which found that only 12 of the FTSE 100's 289 senior posts (chair, chief executive or finance director) were filled by women.

Don't get me wrong. As a female chief executive myself, I'm massively in favour of more women leading companies, being on the board and holding senior cabinet/civil service roles - there simply aren't enough of us. Plus the evidence shows that having women on the board is good for business. Credit Suisse research looking at the performance of more than 2,000 large cap companies over several years found that companies with women on their boards had higher average returns on equity and better average growth than those without. (A similar study showing the impact of having more women in cabinet positions on the performance of governments, would make fascinating reading).

I just don't think quotas are the answer. You know that tired old adage "behind every great man is a woman"? I'm not sure "behind every great woman is an effective quota system" is a big improvement. Interestingly, Women on Boards, the 2011 Davies review into inequality in the boardroom also stopped short of recommending quotas, while making it clear that FTSE 100 boards should aim for a minimum of 25% female representation by 2015.

So will that target be met? Cranfield School of Management, whose update report into women on UK boards was published last November, suggests the UK is making "steady progress" towards the 25% target. OK so that's "steady" rather than "stellar" but it's a start. Cranfield's government backed research also found that 94% of FTSE 100 companies acknowledged the need for greater boardroom diversity and 65% state a clear policy to achieve this.

Businesses clearly have a long way to go before there is equality in the boardroom. But market forces rather than quotas are a large part of the answer. If, as the evidence suggests, companies with women on the board perform better than those with all male boards, every company on the FTSE 350, and all those outside it, should be fighting to get them round the table. That's before you begin to consider the representation issue - the fact that women account for 50% of the population and are responsible for the majority of domestic purchasing decisions. The business/common sense case for having more women on the board is overwhelming.

For any companies refusing to listen, there is always the court of public opinion. Changes to legislation and the rules surrounding corporate governance recommended in the Davies Review mean that publicly listed companies are now required to be far more transparent both about the number of women on their boards and at senior management levels, as well as about their overall policy on board diversity. It is now up to investors, the media and consumers to care enough about this issue to hold companies failing to show enough progress, to account. The same is true of our political leaders.

I leave the last word to Sheryl Sandberg, Facebook COO and author of Lean In:

"I look forward to the day when half our homes are run by men and half our companies and institutions are run by women. When that happens, it won't just mean happier women and families; it will mean more successful businesses and better lives for us all."

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