November 05, 2018 Practice Points

Are Quotas the Answer to the Gender Gap at the Top?

By Angela A. Turiano

In a recent article for the Women Advocate—“Higher But Unbroken: The Glass Ceiling at the Top of the Legal Profession”—I discussed the demonstrated underrepresentation of women in leading roles. Specifically, statistics show that while there are many senior female attorneys, women are noticeably absent in the highest positions. As also stated in my article, this is a complex issue with many factors contributing to the problem and no one solution.

That being said, the State of California has come up with what they believe is one solution: setting quotas. According to a new law enacted on September 3, 2018—the first of its kind in the United States—publicly-traded companies headquartered in California can no longer have all-male boards and will be required to place at least one woman on their board of directors by the end of 2019. The law further requires companies with five directors to add two women by the end of 2021, and those with six or more directors to add at least three more women by that time. Failure to do so will result in monetary penalties up to $300,000. A recent article published on CNN Business entitled California has a new law: No more all-male boards discusses this new law, stating that it was one law enacted among many by the state’s governor to "protect and support women, children and working families." According to a PwC study referenced in the CNN article, while a majority of companies in the S&P 500 have at least one woman on their board, only about a quarter have more than two. Further, one-quarter of California's publicly traded companies still do not have any woman on their board.

These statistics further confirm the premise of my glass ceiling article, which is that while women have made great strides in the last few decades in climbing the corporate ladder, we seem to be stuck a few rungs from the top. This is unfortunate because, in the context of management, having both a male and female perspective is important and leads to better decision making and, ultimately, a stronger and more profitable company. Certainly, studies such as those referenced in the CNN article reached this same conclusion. However, in my view, this concept is a no-brainer. Gender variants are symbiotic and foster productive discourse from differing points of view and generally lead to a more optimal outcome.

But is setting quotas the answer? Opponents of the law argue that “pressure from quotas will lead to unqualified female members and potential discrimination against male candidates.” I would tend to agree. Certainly, while well intentioned, “forcing” companies to include women can lead to the hiring of less qualified candidates simply to fill the slot. This would serve to degrade rather improve the quality of the board, or whatever position is being forcibly filled. Perhaps more concerning is that even if not less qualified, there may be the perception that the only reason a woman got the job was because of her gender. With perception generally being reality, this would also be counter-productive. At the end of the day, neither scenario would serve to further our cause.

So here we are again. To reiterate, this is a complex issue with no one solution. Thus we, as women, need to continue both to raise awareness of the issue and to work—rung by rung—to surge to the top of the ladder and finally break what remains of that glass ceiling.

Angela A. Turiano is a principal Bressler, Amery & Ross, PC in New York, New York.

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