Academic experts respond to European proposals to combat male-dominated boardrooms

18 March 2014

Legal and gender experts from the UK, US, and Europe yesterday outlined their responses to the controversial policy proposals by the European Commission to introduce quotas as a means of combating gender imbalances in corporate boardrooms, in a workshop convened by the Foundation for Law, Justice and Society in affiliation with the Centre for Socio-Legal Studies at the University of Oxford.
 
Julie Suk, a law professor from Cadozo School of Law, New York; Jude Browne, Director of the University of Cambridge Centre for Gender Studies; and Mari Teigen, a professor at the Institute of Social Research in Oslo, Norway, were joined by gender and policy specialists at Wolfson College to debate the legal, political, and economic effects of such quotas, in a workshop entitled Gender Quotas for Corporate Boards and Democratic Legitimacy, held at Wolfson College. During the course of the discussion, they identified the underlying agendas evident in the positions of proponents and critics of gender quotas, and proposed ways in which the policy might be adapted for better outcomes.
 
Denis Galligan, Professor of Socio-Legal Studies at Oxford and Alec Knight, Academic Visitor at the Centre for Socio-Legal Studies, outlined the aims of the workshop, which were to provide an indepth analysis of the issues at stake and go beyond certain well-known but less rigorous appraisals of recent years, including Christine Lagarde’s remark that, “if Lehman Brothers had been ‘Lehman Sisters’, today’s economic crisis clearly would look quite different”.

If Lehman Brothers had been ‘Lehman Sisters’, today’s economic crisis clearly would look quite different.

 
Julie Suk, Professor of Law at Benjamin N. Cardozo School of Law in New York, took up the issue of the economic effects of a more equal gender balance in corporate boardrooms, challenging the predominant claim of the EC that the changes would lead to economic benefits and be good for business. She identified studies in Norway that suggest increased levels of innovation in corporations that have adopted a 40% gender quota at board level, but a decrease in the value of these firms, which could be attributed to the speed of implementation and rapid turnover of board members that resulted.
 
Professor Suk argued that, since economic benefits alone are not sufficiently clearly defined or proven to support the adoption of quotas on economic grounds, we must look to other explanations for the EC’s proposals, which may point to the co-option of the gender equality agenda as a means to promote the democratic legitimacy of governance in the European Union.
 
Charting the evolution of the proposals, she showed that the initial approach by the Vice-President of the European Commission and EU Justice Commissioner Viviane Reding was to allow companies to voluntarily pledge to comply with their recommendations, but that, following limited uptake, the EC proposed legislative measures to bring about a meaningful improvement in the representation of women on corporate boards. 
 
The UK has spearheaded opposition to EU-wide legislation on gender quotas, and this position has been endorsed by Germany on the grounds that the EU lacks legitimacy to legislate in this area, a position contested by Viviane Reding. It is this question of democratic legitimacy that is at the heart of the quota policy proposals, Professor Suk concluded, given the fact that citizens are not represented in the European Commission as they are in European Parliament or European Council. She argued that corporate board gender quotas can do important work in legitimizing corporations' actions in influencing EU policy, through lobbying, consultations, and framework agreements through social partners.
 
Mari Teigen, Research Professor at the Institute for Social Research in Oslo, outlined the situation in Norway, where the culture of gender equality in the significant proportion of state-owned companies has helped create the conditions for the mandatory imposition of quota schemes on large privately owned companies.
 
Under the Norwegian quota law, these companies are faced with the threat of dissolution if they are found to be in persistent defiance of the quota, a more radical approach than that under consideration in most other countries. Professor Teigen identified four key factors that could contribute to the spread of similar policies to other European countries, including conditionality requirements imposed by powerful international actors and through international competition between countries.
 
Dr Jude Browne, Director of the University of Cambridge Centre for Gender Studies, tackled the philosophical objections that underlie criticisms of the quota policy, which include arguments that quotas are unmeritocratic, potentially harmful to the effectiveness of corporations, and that they serve to undermine the position of women on corporate boards since their appointment could be seen to be partly based on their gender rather than their competence for the role.
 
She described the situation in the UK, in which only 13.3% of directors at the top FTSE 350 companies are women, to make the case for quotas in the face of significant legal obstacles and objections from business leaders. 
 
Citing policy efforts in the related fields of racial quotas and affirmative action measures, supported in large part by legal theorists such as Ronald Dworkin, Iris Marion Young, and Anne Phillips, Professor Browne sought to answer the question: Even if we accept that segregation promotes injustice, is this enough of a reason to inject women into corporate boards simply on the basis that there are very few at present?

Even if we accept that segregation promotes injustice, is this enough of a reason to inject women into corporate boards simply on the basis that there are very few at present?

In response, she called for a much greater focus to be placed on the structural causes of gender inequality in employing institutions, and outlined an alternative policy model called the Critical Mass Marker approach. The essential features of this approach is that, rather than a blanket gender quota of 40% applied only to corporate boards, quotas would be applied at any level of the workplace where a disproportionately large group were failing to move from one level to the next of an organization.
 
Besides providing a clear objective for equality and serving as an analytical device for detecting structural injustice, the Critical Mass Marker approach would, Professor Browne argued, be a more effective and proportionate response to blanket quota policies.
 
Crucially, the responsibility for meeting quotas would legally lie with the institution to ensure that the quota is met, overseen by the relevant regulative body. The rburden of proof would lie therefore with the organization to defend its segregation patterns, rather than with the individual to prove a discrimination.
 
Critical analysis and discussion of the arguments were provided by Professor Simonetta Manfredi, Director of the Centre for Diversity Policy Research at Oxford Brookes; Maria Luiza Gatto, DPhil student in the Department of Politics and International Relations and St. Antony's College; and Dr Lilian Volcan, Visiting Fellow of the International Gender Studies Centre, Lady Margaret Hall.
 
Podcasts and publications from the conference will be available to download from the website in the weeks to come.