Women as Board Members: Gender Equality
As the world continues to evolve and grow, gender equality amongst board members of companies is still lagging behind the times. Women are typically underrepresented on boards and with no push from within corporations this trend will continue. Countries such as Norway and the United Kingdom are actively pushing corporations to diversify the boards of publicly held corporations to achieve a greater amount of gender equality.
Having low representation of women is concerning due to the fact that women are as equally qualified as their male colleagues in both education and experience. This can be seen through the overall performance of the companies that have a strong female presence amongst their board members. In 2009, the Cranfield School of Management found that only “12.2% of directors of the FTSE 100 companies were women” (Sealy, Vinnicombe, Doldor 15). However, studies show that when women are represented on boards they yield “42% higher returns in sales, 66% higher return on invested capital, and 53% higher return on equity” than their rival companies (“Women on Boards” 7). This increase in performance is directly proportional to the fact that women have similar skill sets to that of men. In the field of education, women account “for approximately six out of every ten university graduates” graduating from universities in Europe and America (“Women on Boards” 9). Women are consistently proving their ability to succeed in all career paths. Not allowing such women to participate side by side with their male colleagues on boards is a disservice to the company as a whole.
There are a variety of methods being implemented in order to close the gender gap of the board of directors’ positions. The two methods that will be discussed are that of Norway’s quota law and the much more lenient tactic of simple recommendations from Lord Davies of the United Kingdom. In 2002, Norway passed a law that regulated “a minimum representation of at least 40 percent of each gender
Having low representation of women is concerning due to the fact that women are as equally qualified as their male colleagues in both education and experience. This can be seen through the overall performance of the companies that have a strong female presence amongst their board members. In 2009, the Cranfield School of Management found that only “12.2% of directors of the FTSE 100 companies were women” (Sealy, Vinnicombe, Doldor 15). However, studies show that when women are represented on boards they yield “42% higher returns in sales, 66% higher return on invested capital, and 53% higher return on equity” than their rival companies (“Women on Boards” 7). This increase in performance is directly proportional to the fact that women have similar skill sets to that of men. In the field of education, women account “for approximately six out of every ten university graduates” graduating from universities in Europe and America (“Women on Boards” 9). Women are consistently proving their ability to succeed in all career paths. Not allowing such women to participate side by side with their male colleagues on boards is a disservice to the company as a whole.
There are a variety of methods being implemented in order to close the gender gap of the board of directors’ positions. The two methods that will be discussed are that of Norway’s quota law and the much more lenient tactic of simple recommendations from Lord Davies of the United Kingdom. In 2002, Norway passed a law that regulated “a minimum representation of at least 40 percent of each gender
Cited: Sealy, Ruth, Susan Vinnicombe, and Elena Doldor. The Female FTSE Board Report 2009. Rep. Cranfield School of Management, 2009. Web. 14 Oct. 2013. . Teigen, Mari. Gender Quotas on Corporate Boards. Rep. European Commission, 2012. Print. United Kingdom. Department for Business, Innovation & Skills. Women on Boards: Six Month Monitoring Report, October 2011. By Mervyn Davies. UK.GOV, 12 Oct. 2011. Web. 14 Oct. 2013. . United Kingdom. Department for Culture, Media & Sport. Government Equalities Office. Women on Boards. By Mervyn Davies. GOV.UK, 2 Aug. 2011. Web. 14 Oct. 2013. .