Europe is in shambles. Nations are going bankrupt. There are riots in the streets. So you would guess that the folks at the European Commission are focused on some big issues.
But you would be wrong.
The eurocrats in Brussels have much bigger fish to fry. They’re addressing the unmitigated horror of inadequate female representation in corporate boardrooms and contemplating continent-wide quotas.
I’m not kidding. Here are some excerpts from the New York Times report.
Frustrated that her previous efforts to get more women into the top echelons of European business have not yielded stronger results, Viviane Reding, the senior justice official in the European Union, was to announce a new effort Monday that could result in legislation requiring that women occupy up to 60 percent of the seats on corporate boards. …E.U.-wide rules were now needed, she said. “Personally, I don’t like quotas,” Ms. Reding said. “But I like what the quotas do. Quotas open the way to equality and they break through the glass ceiling.” Countries that have quotas “bring the results,” she said. Ms. Reding has long campaigned for major changes in European boardrooms and had given industry “a last chance” to improve its record on placing women in top management.
Isn’t that nice. She doesn’t like quotas, but she has no choice because she gave industry a “last chance” to engage in gender bean counting and they didn’t comply.
I wonder if it’s ever occurred to this über-bureaucrat that it’s not her job to tell private companies who to hire, fire, or promote?
As an aside, the New York Times manages to demonstrate its bias by directly implying that “genuine equality” only exists if boardrooms have equal numbers of men and women.
Having now concluded that self-regulation has failed, Ms. Reding has set her sights on legislation that could, if enacted, drastically speed up a revolution in the position of women in the workplace that began many decades ago but has so far failed to deliver genuine equality in many areas of business.
Has it ever occurred to the reporter that “genuine equality” exists when everyone has an equal chance and government doesn’t put a thumb on the scale? But regardless of what he thinks, doesn’t good journalism mean keeping his opinions to himself?
Maybe I’m just too old fashioned.
Let’s return to the meat of the story and the actions of Ms. Reding. In this passage, I like how she blames “society” because companies didn’t kow-tow to her voluntary suggestions.
In the announcement to be made Monday, Ms. Reding will call for a new round of consultations with governments, trade unions, companies and civil groups. The move comes a year after she called on companies to take voluntary steps to increase the representation of women on boards to 30 percent by 2015 and to 40 percent by 2020, by replacing departing male directors. …Ms. Reding said that the severe economic downturn in Europe that has pressured companies to focus on their bottom lines was not responsible for the failure of her voluntary initiative. “It is really a question of society,” she said.
The story continues with discussion of the onerous plans being concocted by Ms. über-bureaucrat.
Ms. Reding said that the consultations, beginning Monday and ending on May 28, would determine the proportion of women that should be on boards under any E.U.-wide legislation; whether quotas should apply to state-owned companies as well as publicly listed ones; whether both executive and nonexecutive boards should be covered by the rules; and what sanctions should apply to companies that do not meet the objectives, and if there are circumstances where exceptions are necessary.
Unfortunately, the private sector in Europe has the same cringing approach as their counterparts in the United States. Instead of boldly saying that corporate boards are a private matter for shareholders to decide, representatives from big companies accept the intrusion and merely complain about implementation.
…the European Round Table of Industrialists, a forum for the chairmen and chief executives of major multinational companies, has warned that big divergences among sectors and national traditions meant any measures should remain voluntary. “Societal changes take time,” said Carlo Bozotti, the chief executive of STMicroelectronics, a semiconductor company, and the head of a group at the Round Table looking at the issue. “There is no one-size-fits-all solution for industrial companies from multiple sectors, of various structures, and from diverse cultural backgrounds,” he said.
The article concludes with an assertion that “gender-diverse” boardrooms lead to better economic performance. That may very well be true, but it suggests that shareholders are deliberately sacrificing income and wealth in order to retain something akin to an old boys’ network. That seems rather implausible, to say the least.
There is plentiful evidence from business consulting firms including McKinsey & Co., and from Catalyst, a nonprofit research group, that companies with gender-diverse management teams experience higher growth in their share prices, better-than-average operating profits, and outperform their rivals in terms of sales, return on investment capital and return on equity, according to the report. That research showed that women asked more questions and made fewer reckless decisions, proving that “women are not a cost, women are a benefit,” Ms. Reding said.
I want to close with a semi-optimistic note. As crazy as it is for Ms. Reding to try to dictate the number of men and women in corporate boardrooms, at least she’s not complaining about discrimination based on looks or height and trying to get government involved in those areas. At least, not yet.
[…] European Commission advocates gender quotas at private […]
McKinsey supports this? Good reason to fight against it and, by the way, f**k McKinsey!
Now I’m confused. I thought the argument was that there is no relevant difference between men and women, and so the only possible reason why companies don’t have women on the board is sex discrimination. But then they say, “That research showed that women asked more questions and made fewer reckless decisions.” That is, women apparently ARE different from men in job-relevant ways. And if women have attributes that make them better at the job, it follows that they may also have attributes that make them worse at the job. Indeed, the two points mentioned could be negative as well as positive. Maybe women ask more questions because they are argumentative and contentious. Maybe a fear of making reckless decisions also makes them afraid to make bold moves. Maybe the cons outweigh the pros, and there is a good business reason to not have women on the board.
These folks really should make up their minds: Are men and women exactly the same, or are they different?
It would be interesting to go for diversity of opinion rather than diversity of physical characteristics. I wonder what the political landscape would look like if we demanded an equal share of libertarian viewpoints.
Excellent post – thank you!
@Zorba. I love it – “solidarity” quotas — at least two Greeks on the board since they’re having such a hard time.
And don’t forget that the Greeks have demonstrated such expertise in running things effectively…
Indeed why not also racial quotas, BMI index quotas, ethnic origin quotas, or “solidarity” quotas — like have at least two Greeks on the board since they’re having such a hard time.
The Europe of 1-2% growth trendlines is declining and understandably suffering. So the voter lemmings will predictably react by further clobbering of competitiveness with mandates. You don’t last long on that path. Perpetual and relentless loss of privileged standard of living relative to the emerging world will make everyone in Europe eventually cry uncle — men, women, children.
With the vicious cycle of decline so firmly established, the end for Europe must be near. A couple more decades perhaps.
These same bureaucrats set up business favorable import tariffs, infrastructure projects, IP laws, subsidies etc. which liberals take for granted but a business favorable (according to studies) board quota somehow meets objection. And most often by men – because women never even got promoted to a such position where there could object…? 🙂
What an amazing idea.
Wonder how many ladies are on the board of the New York Times?