Australian politics, society & culture

Status Quota

Do Mandatory Gender Quotas Work?

A quota success story: an elected female representative leads an Indian village meeting for local women. Courtesy of the Hunger Project.

Cordelia Fine

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More women are needed in leadership roles. But mandatory quotas may not be the best way to get them there.

March 2012
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Despite more than 25 years of anti-discrimination legislation, it remains the case that the higher up any organisational ladder you look, the fewer women you see. In Australia, for example, women made up just 8.4% of board directors and 8% of executive managers in 2010. This persistent ‘vertical sex segregation’ has, in some quarters, led to demands that it is time to actively shake up the status quo, rather than leave it to peacefully evolve at its own idle pace. Norway was the first country to implement quotas for female directors on the boards of publicly listed firms, with legislation mandating that 40% of all public limited firms’ directors be women by 2008. Several other countries have since followed Norway’s lead.

In this global context, the ASX Corporate Governance Council introduced a diversity policy in January 2011 requiring all publicly listed companies in Australia to set, and report on, targets for increased female representation. The lurking potential threat – that failure to meet voluntary targets might lead to mandatory quotas and penalties for non-compliance – was made explicit in the Australian Human Rights Commission’s Gender Equality Blueprint 2010. The blueprint recommended a minimum target of 40% women on all Australian government boards, senior executive ranks of the public service, all companies providing goods or services to the Australian government, and on the boards of all publicly listed companies in Australia.

It is not necessary to be a feminist, driven by concerns of social justice, to want to see more women in senior leadership positions: mere pragmatism can create the same desire. To under-utilise female skills and education, and to lose large numbers of experienced women from the talent pool, makes little business or economic sense. But even if you are persuaded of the benefits of greater female representation in leadership roles, there is still room for plenty of doubt regarding the best way to achieve it.

This was the question tackled by a report to be launched in April by the Centre for Ethical Leadership (CEL) at Melbourne Business School, Targets and Quotas for Women in Leadership: A Global Review of Policy, Practice and Psychological Research. Authored by two of my colleagues at CEL, research associate Jennifer Whelan and centre director Robert Wood, the report notes that voluntary targets for sex equality within an organisation may be written into policies and procedures, and include reporting on outcomes and even penalties for failure. Being voluntary, however, they are likely to involve less prescriptive forms of affirmative action. These include “opportunity enhancement”, which tries to increase the pool of female talent through specially targeted mentoring, training, development and networking programs, and “weak preferential selection”, in which a woman is selected if and only if her qualifications are equal to those of the strongest male candidate. Mandatory quotas, by contrast, could instead require affirmative action in the form of “strong preferential selection”, in which preference must be given to the woman even if she is (or appears to be) the weaker candidate.

The report’s review of the arguments for and against increasing female representation in senior leadership through the use of targets versus quotas regularly brushes up against a lack of consensus on a very fundamental issue: why sex inequality in the workplace continues to exist. This is most strongly reflected in one of the most common objections to quotas, which is that they violate the principle of merit. This objection of course implies that if sufficient numbers of able, competent and successful women existed for the roles, then they would most certainly already have them. Such confidence in a level playing field for the sexes has a surprisingly long history. Over a century ago Charles Darwin’s cousin, the esteemed psychologist Francis Galton, argued that the absence of women in occupations requiring exquisite powers of sensory discrimination, such as tea-tasting, piano-tuning and the like, was all the proof one might require that men’s perceptual senses were superior to those of women. (Perhaps not coincidentally, Galton was of the view that sensory abilities correlated with intellectual ones.) That Victorian merchants might not be entirely sex-blind in their hiring practices was apparently not considered by Galton. After all: “If the sensitivity of women were superior to that of men, the self-interest of merchants would lead to their being always employed; but as the reverse is the case, the opposite supposition is likely to be the true one.”

A similar faith in meritocracy was recently expressed to me at a party by a man who worked in finance. When I mentioned that part of my research at CEL involved investigating subtle forms of sex discrimination in organisational decision-making, he quivered like a war horse at the sound of a gunshot. “I most certainly discriminate in my employment decisions,” he sternly informed me. “I discriminate on the basis of merit.”

While few argue that sex discrimination, unconscious or intentional, has been eliminated altogether (except, perhaps, within one’s self), some academics and commentators have suggested that such factors now play a relatively minor role in men’s continuing stranglehold on positions of power. Instead, it is suggested, we are currently enjoying something close to a revised version of equality in which men and women are not equal, but equally free to express their essentially different natures. Equality of opportunity hasn’t led to equality of outcome, but maybe that’s OK. As The Sexual Paradox author Susan Pinker put it: “Is this a problem that should be fixed?” Her view, that tough and time-greedy careers may simply appeal less to the naturally more nurturing, socially driven female brain, has many advocates.

By contrast, to others there is little doubt that sex discrimination, albeit often unintentional or benevolently intended, significantly contributes to workplace inequality. As the CEL report points out, merit is a rather subjective phenomenon. The numerous biases against female employees documented by researchers in laboratory studies, showing how judgments of merit are shaped by implicit preconceptions about gender, often resonate with the personal experiences of those from the business world. Take, for example, the helpful recommendations made by researchers on the basis of a review of bias in evaluations of candidates for traditionally masculine roles, published in the journal Academic Medicine. The researchers’ evidence-based, if often absurd, recommendations for women seeking such roles – including dousing oneself with a masculine scent for interviews, and concealing a state of pregnancy – reflect research showing that femininity triggers less generous assessments of ability.

In a real-world echo of the extra contortions required of women to seem equal to men, Carol Schwartz, founding chair of the Women’s Leadership Institute Australia, recalled her outrage on seeing an advertisement in the Australian Financial Review for a reputable head-hunting and recruitment firm. The ad’s headline, ‘Women Non-executive Directors’, was followed with the question: “Do you have a double degree?” To Schwartz, it was telling – and entirely consistent with her own experience of corporate Australia – that a double degree should be deemed especially necessary for women seeking a director role. While it’s unclear whether, say, attaining an MBA is more or less demanding than disguising an eight-month baby bump, Australian Business School economist Renée Adams and her colleagues reported last year that Australian female directors are more likely to have achieved the former than their male counterparts, and do indeed tend to be more highly educated.

It’s to be expected that the explanation of sex inequality you tend to favour will influence your feelings about quotas. If you believe that men and women now generally get the jobs they want and deserve, the use of quotas to force an adjustment to this happy state of affairs seems unlikely to appeal. If, on the other hand, you consider many organisations to be rife with old boys’ networks, homophily and sexism, then affirmative action policies will seem less like violations of the principle of merit.

Less easily anticipated though – and flagging the difficulty of addressing the complex problem of sex inequality – is the psychological fallout from affirmative action. While in theory people might regard such policies as giving talented and deserving women a sex-based boost that (white) men enjoy by default, the practice is starkly different, as suggested by decades of research from the United States. Reviewing this literature, Jennifer Whelan and Robert Wood argue that a clear theme emerges from studies of people’s attitudes towards affirmative action beneficiaries: “Women hired under affirmative action practices are in general seen as less competent and deserving of their position, and the women themselves [have] similar perceptions.” Several studies, many led by New York University’s Madeline Heilman, a professor of psychology, have confirmed that female employees hired under affirmative action are regarded as less competent than, say, identically qualified men. Female beneficiaries, in turn, make similar inferences about themselves. Particularly, in the absence of feedback to the contrary, their own self-beliefs and behaviour follow suit, leading to lower self-ratings of confidence, a timid, performance-limiting approach to work and a diminished interest in continuing in leadership positions.

Such studies don’t tell us whether women actually hired under the stigma of affirmative action are less competent. Whelan and Wood note that there are apparently no hard data available to indicate the validity of the common perception in Australia that women selected under affirmative action regimes such as targets or quotas would be less well qualified than those appointed with no such policies in place. It certainly seems possible that, at the senior leadership level, the compounding effect of decades of sex discrimination (not to mention the cumulative time and energy consumed by the household responsibilities that men still ungallantly tend to shirk) might leave women, on average, with some catching up to do even if they have no less intrinsic potential and drive. Norway’s quota required an approximately four-fold increase in female representation in four years but, notes Adams, there is debate among economists as to the effects on both the age and work experience of board members. For example, while University of Michigan economists Kenneth Ahern and Amy Dittmar argued recently in the Quarterly Journal of Economics that the effect of quotas was to lower the age and high-level work experience of board members, David Matsa and Amalia Miller reported (in ‘A Female Style in Corporate Leadership? Evidence from Quotas’) that that women appointed to boards after quotas had very similar education and professional experience to those appointed before, and that the age distribution of board members remained stable. The decline they observed in short-term profits was, they argued, due to reduced staff layoffs – with unknown, but potentially positive, longer-term effects. 

Regardless, the psychological research indicates that even if corporate Australia is exploding with women thoroughly deserving of senior leadership roles, if the dominant cultural mindset supposes otherwise then prescriptive forms of affirmative action may have undermining, self-fulfilling psychological effects. Ironically, assumptions about the incompetence of women hired under quotas might be more damaging to those women’s performance than any actual shortfall in their experience.

And yet, presumably one hope held by advocates of quotas is that, by disrupting the status quo, the uncertainties and assumptions about female leadership it helps sustain will be challenged and changed. Scope for optimism on this front is offered by an investigation of the effects of a political gender quota system in India. In 1993 a law was passed requiring that every election cycle leadership positions be reserved for women in randomly selected village councils. Ten years on, women were more likely to stand for, and win, elected positions in councils that had reserved positions for women in the previous two elections. In addition, the experience of living in a village with a female leader on the council improved men’s unambiguously biased perception of women’s leadership abilities. Perhaps no less importantly, though, the effects of the quota system trickled down to the next generation. In villages selected to reserve a female leadership position for two election cycles, girls were much more likely to have similar aspirations to boys, and the gap in educational achievement was closed. This was due entirely to enhancements of girls’ achievements and desires, such as to delay marriage, graduate and get a skilled job. Parents’ aspirations for their daughters were similarly changed under female leadership. In what is perhaps an implicit appeal to the need for courage and patience in thinking about quotas and their effects, the researchers note the delayed timing of the positive consequences, suggesting that “[a]lthough the first generation of women leaders may encounter significant prejudice, their experience can pave the way for others to go further”.

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Sex inequality is a multi-level, complexly interacting, subtly self-reinforcing problem – and it is sustained by far more than the kinds of organisational decisions that quotas can override. As a large body of research shows, cultural realities and beliefs about females and males – represented in existing inequalities, in media, and in the minds, expectations and behaviour of others as well as our own – alter our social perceptions, self-concepts, interests and behaviours. The potential ripple effects, then, of intervening at one level while leaving others largely untouched need careful consideration. In line with this, the CEL report draws attention to the need for greater understanding of the psychological repercussions of affirmative action practices, so they might be framed to increase positive trickle-down effects and minimise bottom-up backlash.

It remains to be seen whether Australia will follow Norway’s lead of the short, sharp attack on inequality via mandatory quotas. How successful such a policy would be in Australia is also unknown, but one can only hope that it would be more effective than the patience and good intentions currently in place. Who knows, perhaps the answer to how well quotas would work lies in our collective minds. To paraphrase Henry Ford, whether we believe they can work, or whether we believe they can’t – we are right.