OK, Quotas Are a Trend - Building Gender Balanced Business

“More focus should be placed on ensuring that the proportion of women occupying C-suite roles, and reporting to these positions, is increased.”

I asked Chris Thomas, former head of the global Board Practice at Egon Zehnder what he thought. “The introduction of 40% female board quotas in France is regrettable,” he said, “and is a further example of a nation treating a symptom rather than the disease. What is really needed in most Western societies is for gender balance to be a focus throughout the business so that more female senior executives will be retained and motivated and in this way gain the experience and wisdom required to be good Directors. The risk is that too many women will be appointed to boards and that they will lack the exposure and confidence to be able to contribute in a meaningful way to board decisions and deliberations. More focus should be placed on ensuring that the proportion of women occupying C-suite roles, and reporting to these positions, is increased.”

I too have argued (see the 20-first WOMENOMICS 101 Survey) that a focus on boards is not the best indicator of the gender balance inside companies. Still, you can’t help but think – and studies prove it – that companies would be run better were there more women on their boards (see Apple’s clumsy iPad naming below). And better balance on boards is one way of building awareness around gender issues.

“We’d love to have more women, we just can’t find them”: It’s the same thing companies have been saying for years. And it’s half the point of quotas.

In the meantime, as in Norway and Spain, the same refrain is likely to be heard: “we’d love to have more women, we just can’t find them.” It’s the same thing companies have been saying for years. And it’s half the point of quotas. To change How boards are looking for directors, What they are looking for and Where they are looking for them.

HOW: An awful lot of boards are still the least transparent part of the corporate system. People are appointed, often through personal networks. In France, 98 people control 48% of all board directorships on the CAC 40. This kind of in-breeding and old boy’s networks must evolve for France to become a more transparent and global economy. For that reason, Christine Lagarde, the Minister of Finance, and Laurence Parisot at the employers’ federation MEDEF have both publicly supported the quotas legislation. So has Anne Lauvergeon, the boss of AREVA, who put it well this year on Radio Monte Carlo when she said: “It is not normal that 50 percent of the population is not represented at the top of companies. I am on too many boards where women are underrepresented. Let’s get things going. Yes, let’s get things going with quotas.”

WHAT: Most boards are made up of individuals who have been CEOs of companies. This trust in pulling together a group of big names who have run businesses may seem to make sense. But anyone who has worked with boards knows that a collection of big name, individual stars who may not have bothered brushing up too recently on their corporate governance training may not be the most effective team at supervising the complexity of today’s global businesses. The current financial crisis points to a lot of governance holes. Team composition, balance of skills and knowledge and good teamwork make for an effective board. A lot of those requirements can be found beyond the CEO’s office – and within the female executive talent pool.

WHERE: Finding women requires looking beyond the usual top layer of business, into what Peninah Thomson has called the “marzipan” layer below. Women’s networks and forums have exploded over the past decade, and women have been lobbying for more visibility and power. These forums will be good hunting grounds, in addition to some effective online social networks that women are increasingly using. The Norwegians seem, from early reports there, to have been pleasantly surprised by what they discovered when they went hunting for some boardwomen. And by what it brought to their boards.

It’s a shame France needed legislation to get here. The country is teeming with smart and experienced (and exceedingly well-dressed) female executives. But it is encouraging to see that the idea garnered broad bipartisan support. The French know it is time.

Who’s next?