On the BBC's World At One (WATO) programme today, Martha Kearney discussed the topic of quotas of women on the boards of corporations. This is the programme on iPlayer (available 7 days, 38.21mins in).
To give the topic some context Kearney begins by saying that David Cameron wants to see more women on the boards of the UK’s top companies. Also, the European Commission is about to outline proposals for a mandatory minimum 40% quota of women on the boards of listed companies by 2020. In addition, Christine Lagarde even suggested that the 2008 financial crisis might not have been so serious if there had been more women in senior banking positions.
The WATO programme asked if women on boards actually improve the performance of companies.
Michael Buchanan who runs the website Campaign for Merit in Business doesn’t believe so. He cites two studies that show financial performance declines when there are more women on boards. He firmly believes women should be appointed to boards on merit. (I agree!) In his work he has not seen any evidence that increasing the number of women on boards improves performance. Mike also authored this report, The Gender Diversity Delusion.
Isobel Rimmer, founder of Women on Boards, says these two reports ignore the fact there was an imposed quota and that is not the answer. She is concerned however that women do not have the representation at board level that they should have. She feels this must help businesses and financial performance should not be the only measure. She feels it is a shocker that FTSE 100 firms only have 16.7% female board representation.
You may be interested in an EIRIS webinar on this subject on 27th September 2012 at 2pm. New research: does gender diversity affect financial performance?