Politicians and most journalists were quick to label quotas as “bullshit” or “idiocy”, managers were afraid of “a lack of qualified women” and “discrimination of more competent men”. The interpretations of the proposed directive often distorted reality, the commentaries were emotional and overall the proposal was presented as a “Brussels dictate”. But at the same time something very important happened. Thanks to the proposal, the discussion of a marginalized topic finally started, and, at least from time to time, it focused on the most important thing – why we should strive for gender balance in decision-making, whether with quotas or without them.
Is it really hard to find 70 qualified women?
Let’s clarify what the new legislation is really about. The European Commission proposed the measure with the aim of attaining a 40% objective of the under-represented gender in non-executive board-member positions in publicly listed companies. An exception was made for non-listed companies and small and medium enterprises with less than 250 employees and an annual worldwide turnover not exceeding 50 million EUR. It means that in all EU countries it applies to around 5,000 companies. The 40% objective should be reached by 2020 in private companies and by 2018 in public undertakings. The proposal also includes, as a complementary measure, a “flexi quota”: an obligation for listed companies to set themselves individual, self-regulatory targets regarding the representation of both sexes among executive directors.
In the public debate, the impact of the legislation on Czech companies was excessively dramatized. In practice, the proposal applies to about 10 companies that have 7 years to find 50 to 70 women able to serve on non-executive boards. The most common and appropriate profession between the non-executive directors are lawyers and economists. Taking into account that 67% of all university graduates (17,168 women in 2011) in economic sciences and 59% (1,749 women in 2011) of law and legal science graduates are women, it seems very unlikely that it would be a problem to find 70 qualified women in the next 7 years. The data also clearly show why we need some measures to reach gender balance: although women are well educated and comprise the majority of university graduates (61% in 2011), they represent merely 18% of non-executive directors in the largest publicly listed companies in the Czech Republic (the EU average is 16.8 %) and only 6.3% of executive directors (the EU average is 10.2 %).
Let’s make merit-based appointments
Another frequent concern was that the legislation would lead to discrimination of “better qualified men who will have to yield their positions to less qualified women”. We should, however, ask how board members are appointed now. Unfortunately, Czech public ventures often lack criteria for “qualified candidates” and merit often is not decisive. The non-executive boards of public undertakings are often occupied by former politicians and serve as a part of a system to cut informal political deals among the parties.
But the merit does not always play the main role even in the private sector. A number of studies (catalyst.org, pnas.org)have repeatedly demonstrated that women face strong stereotypes which disadvantage them on the labour market. It has been proven that a CV or essay signed by a man’s name is evaluated higher than the same one with a woman’s name! Even if we do not want to discriminate against women consciously, stereotypes can affect our decisions more than we think and will admit. Thus, one of the undeniable benefits of the new legislation is that the affected companies should apply clearly stated, gender-neutral and unambiguous criteria for candidates. Given equal qualification, priority shall be given to the under-represented sex, which is really far from discriminating against better qualified men.
The opponents of the proposal often emphasize that the regulations will create a new administrative burden for the companies. Let’s assume this objection is valid – at least the companies will have to set up clear criteria for candidates to their non-executive boards and self-regulatory measures for executive directors, which will cost some time and money. But on the other hand, the companies should be interested in another fact – gender balance in their leadership is worth it! A growing number of studies (ec.europa.eu, mckinsey.com) demonstrate that gender-balanced boards can improve the financial performance of companies, contribute to a more productive and innovative working environment and can improve overall company performance. A more diverse collective and mind-set incorporates a wider range of perspectives and therefore reaches more acceptable decisions.
Quotas won’t change all
Critics of gender quotas often object that this measure cannot change the underrepresentation of women per se and will have to be accompanied by other measures. This is absolutely true. There are many barriers that complicate women entering the top positions both in management and politics. Besides the stereotypes, a woman’s career is crucially affected by motherhood. The lack of parttime jobs and other forms of flexible work, together with the lack of nurseries and kindergartens, has resulted in the Czech Republic having the lowest employment of women with children under 6 years in the EU. As a result, women are disadvantaged in their career growth – those who become mothers often spend 2-8 years out of the labour market. Women also lack positive examples, role models of other female leaders and therefore mentoring programmes and special trainings for talented women should be launched and supported.
According to the results of a Eurobarometer European public opinion poll, 83% of people in the Czech Republic (compared with 88% in the EU) think that, given equal competences, women should be equally represented in positions of leadership in companies, and 78% (75% EU average) are in favour of legislation on this matter under the condition that qualification is taken into account.
The discussion about the EC proposal had one quite surprising final outcome in the Czech context. As expected, the Czech government and Parliament have officially refused to adopt the proposal. But what is interesting about this rejection is its rationale. It is grounded on 2 arguments – first, that the legislation is very weak (as it targets only on the non-executive boards), and, second, that efforts for gender balance should start at the political level because even the European Commission has not reached gender equality yet. These are certainly valid concerns. Of course, we may discuss to what extent they represent the real conviction of politicians (as some of their statements revealed the depth of stereotypes in Czech society). Although the rejection of the proposal is disappointing for the supporters of gender equality, these two arguments give them some hope and open the door for further negotiating and a factual discussion about how to efficiently change the current state of affairs.