With the ground breaking news earlier this week that the European Parliament passed a vote on the requirement that large, listed companies ensure women hold 40 per cent of non-executive board seats by 2020, comes the realisation that the global business community has to wake up and smell the coffee.
The vote itself is good news for advancing the gender diversity agenda. This major business issue is now on the radar of the world-wide corporate community as an ambition, serving to add focus and a sense of urgency. EU Commission Vice President Viviane Reding called the resolution a "historic moment for gender equality in Europe."
However, the implications of the vote and what this means for the wider business community and talent is not yet clear, as this is essentially dependent on how and if this directive is enforced.
One major factor to consider is the disparity between the regions as a result. Certain regions, Asia for example, are already lagging behind in terms of progress in the advancement of women, and this directive could serve to exacerbate the situation, further stretching the already limited talent resources.
Female talent in Europe will be in hot demand. Women ready to take on the challenges of the board are already in short supply and businesses will need to be open to women who are taking on their first board appointment. This situation presents its own set of challenges, in ensuring board members are adequately prepared for the role and responsibilities they face.
Female leaders in the rest of the world may be called upon to take up board positions in Europe, resulting in a major talent drain in other regions.
Whilst the UK government, for example, is likely to remain steadfast in its reluctance to comply, the principle of quotas is gaining pace and is likely to become law, replacing the current voluntary initiatives, which in reality have failed to deliver beyond the FTSE100. This will have a fundamental impact on UK business as a whole and if we don't wish to be left behind, real action needs to be taken to avoid reducing our talent pool and losing half of it to more enlightened markets.
When the UK smoking ban was being introduced, many people thought it was unachievable. However, post 2007, it has become the norm and most people now can't imagine sitting in a smoky work environment or eating in a smoke-filled restaurant. Perhaps it really will take legislation to enforce a new reality, which is already well overdue.
Having developed Inspire and Aspire, our global network for senior business women over the last five years, we know the talent is out there and the old arguments do not stack up. There is a plethora of board-ready women and talented female executives with the right skills in the UK. They help a business reflect and identify with their customer base and the community they serve. Fundamentally, creating more balanced teams leads to better more robust decisions, improved performance and mitigates risk. When you look at it as a business issue rather than a gender issue why on earth would you neglect or fail to engage with 50% of the workforce?
However unpalatable they may be to some, imposing quotas on business will have a significant impact at board level...but that is only half the story. The big question is managing the pipeline. How do we ensure women leaders are ready to progress and work their way up the ladder to take on these senior roles in the future? There has to be a seismic shift in business, society and education to fully embrace the new norm and benefit fully from a more sustainable talent pool.
For now we'll have to wait with baited breath as the proposal goes to member states for further discussion in the coming months. In the meantime, we'll be encouraging senior female leaders across the globe to be ready.