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Women in the Boardroom

August 19, 2009

Women continue to enter the workforce in growing numbers, but why aren’t more of us making it to the top? In 2008, 15 percent of the seats on the boards of Fortune 500 companies were held by women. Fifteen years earlier, this number was six percent. In other words, while the number of women board directors has risen steadily over the past 15 years, gender diversity in the boardroom is still far from reality.

In a controversial move to promote women in the boardroom, Norway introduced a law requiring the boards of all publicly traded and public limited companies to be at least 40 percent female. The law, introduced in 2003, gave companies until 2008 to comply. Today, Norway has the world’s highest proportion of women board directors; the percentage of women on Norway’s corporate boards shot up from a mere six percent in 2002 to 31 percent last year.

But not everyone is convinced that mandated corporate diversity is a good thing. Some argue that quotas interfere with the board’s responsibility to maximize shareholder returns, given that many women lack board experience. Yet research has shown that companies with higher percentages of women in the boardroom tend to financially outperform companies with the lowest percentages of female board directors – significantly.

Opening leadership positions to women has other benefits, too. Women in leadership roles encourage other women to enter the workforce, and given that intense labor shortages are expected to return as soon as the economy recovers, all companies should be looking for ways to expand the talent pool. It also lets young women know that their skills will be valued and rewarded, which is one of the best ways to attract and retain talent.

As a younger woman in the workforce, I can personally attest to the benefits of having role models and mentors who are also women. Successful female leaders help younger women know that “someone like me can be successful” and, as role models and mentors, they’re able to share strategies for female career success – things like achieving work-life balance, taking maternity leave, overcoming gender challenges and much more. Women, like men, need effective development and mentoring to help ensure that when they make it to the top, they’re ready to excel.

While quotas may not be the answer to gender diversity in the workplace, the truth is that the last 15 years of encouragement hasn’t produced much progress. In fact, a recent study of gender diversity in UK companies concluded that at the current rate of progress gender parity won’t be achieved until 2225. Clearly, more work needs to be done and quotas may be an effective way to help qualified, talented women ascend the career ladder – women who otherwise may have been overlooked.

Of course, mandating companies to promote women to the top only solves part of the problem; workplace cultures and attitudes still need changing. Rather than reduce women’s issues to a matter of political correctness, employers need to recognize the enormous talent that women bring to any workplace. Companies must be willing to invest in women, which could mean providing flexible working arrangements or ensuring that female employees have access to female mentors and role models.

While there is no one right answer, let’s hope the success of Norway’s board diversity law puts pressure on companies around the world to promote more qualified women to leadership positions – in and out of the boardroom.

Based in Halifax, Nova Scotia, Amelia DeMarco works as a research and policy analyst and holds a Masters degree in Public Administration. You can contact her at amelia.demarco@gmail.com.

3 Comments
  1. Sandy Simpson permalink
    October 18, 2009 11:14 am

    Amelia:
    I loved your paragraph about how as a younger woman you can see the benefits of having women role models and mentors in the workplace. I will like to quote you in a piece that I am working on for my master’s. I would of course reference back your article and indicate that it was a quote from you.

    Would you have any concerns?

    Thank you for your inspirational and fact filled article.

    Sandy

  2. Don permalink
    October 25, 2009 12:30 am

    I agree 100% that we need more women in the Boardroom. Men and women are different and we think differently. Men tend to take risks and women tend to be more conservative. Take Iceland for example. Two of their major banks were on the verge of collapse last year. Both of the banks were run by men at the time. But both men were later replaced by women so that the banks could move in the right direction again. The men had taken too many risks which caused the banks to fail. So the only way to correct it was to bring in women to run the banks. Men still hold positions directly under the women so they can give their input and make recommendations to the women. But it is the women who have the final say now. Now, the banks are taking alot less risk than before.

  3. Don permalink
    December 25, 2009 9:47 am

    The following articles describe how Iceland had to put women in top level economic and political positions to try and turn their economy around. Iceland’s new female Prime Minister felt that changes needed to be made. So she replaced alot of the men who were in charge before with women. Half of her Cabinet seats are now filled by women as well. And with 2 of the country’s top banks on the verge of collapse she made the decision to remove the men who were in charge of each of those banks. Both of the men were replaced by women. But the new female leader did say that it is important that men and women work together. The only difference now is that women are charge and sitting at the head of the table and have the final say in the decisions that are made instead of men. Here are a few artciles:

    “Women Reach for Power in Iceland”
    http://www.businessweek.com/globalbiz/content/apr2009/gb20090424_328219.htm?campaign_id=rss_daily

    “Viking Women Aim to End to the Age of Testosterone”
    http://www.pbs.org/wnet/wideangle/blog/viking-women-aim-to-end-to-the-age-of-testosterone/4655/

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