This House believes that gender quotas in the EU are advantageous for the economies of member states

    Despite enhanced access to education and political participation, women remain underrepresented in leadership positions worldwide. The gender inequality in representation is often explained through historical, cultural, socioeconomic, and institutional factors affecting women’s status. In 2013, the business world has only two female chief executives in the FTSE 100.[1] The introduction of gender quotas is an effort to close the participatory gap between genders. Both those in favour and against quotas link their arguments to the effects on the economic factors.  The latest example takes place in the European Union (EU) where the voluntary self-regulation aiming at gender equality in boardrooms did not change the status quo and women still account for only 13.5 per cent of board members in large public companies.[2] This failure resulted in a proposal from the EU Commission that will require national governments to impose penalties, such as fines or a loss of government contracts, when more than 60 per cent of a firm’s non-executive directors are of the same gender in 2020. State-owned companies will have to meet the requirement by 2018.[3] The written style of the proposal ensures that men are likewise not negatively affected by gender imbalance. It would introduce reporting requirements for any company in which fewer than two out of five posts on the corporate board were held by women or men. In those cases, the companies would have to prove candidates for board positions had been chosen purely on the basis of experience. In situations where finalists had the same level of experience, the post would have to go to the candidate from the gender underrepresented on the board -- in most cases to a woman.[4]

    This debate requires some definitions. This discussion interprets ‘gender quotas’ as a set minimum of reserved places for women in business institutions that could be constitutional and/or legislative or voluntary. By ‘advantageous’, the proposition argues that gender quotas stimulate, support, or foster an increase in the capacity of an economy to produce goods and services, compared to the period prior to their introduction.

 

Title 
Gender equality is based on fundamental human rights endorsed by the EU which needs to be addressed
Point 

Gender equality at the workplace is an important principle that businesses should follow. If we consider men and women to be equal then they should be equally represented at the top levels of politics, society, and business. This is not simply a national issue, but a pan-EU problem of justice and equal rights. Gender equality is linked to the fundamental human rights that the EU endorses and the lack of progress in terms of women in high positions of Europe requires a proactive stance. As Morin-Chartier argues, the EU directives are about being a model for one another and the quotas will serve as an archetype for others worldwide.  Therefore, the quotas are necessary to encourage progress in this field as other tools have not brought equal gender representation.

Counterpoint 

Gender equality comes from the society. Businesses operate in a different way than the overall society and imposing quotas on them will not necessarily change the gender inequality. Businesses require skills to expand and progress and, therefore, quotas undermine them by affecting their employment process. At the same time, these measures do not address the origins of inequality which are linked to tradition and cultural background of a society and thus, will not bring progress in this field.

Title 
More women in the labour market leads to higher GDP
Point 

By introducing gender quotas to ensure gender equality, one could not only increase the labour force by bringing more women but also enhance the labour productivity and the available talent pool in a country. This would stimulate businesses to expand, innovate, and compete. This process has an effect of raising tax revenue and social security payments. The overall effect is the positive growth of the economy.  

Therefore, addressing social injustice and higher economic returns are mutually supportive goals.

This argument is particularly relevant for qualified women who could be hired at executive positions, but are prevented from doing so due to cultural beliefs, societal practices, and lack of economic and institutional support. A study by Asa Löfström on the links between economic growth and productivity in the labour market argues that if women’s productivity level rises to the level of  men’s, Europe’s GDP could grow 27% which makes women’s participation is of crucial importance to Europe’s economy.[1] Quotas would allow for a better utilisation of the talent pool; as currently, 59% of the students graduating from Europe’s higher educational institutes are women.[2] With the current access to education and the introduction of quotas against barriers of existing prejudices, women will have incentives and support to increase their productivity

In the case of Norway, the quota law requires all public, state-owned , municipal, inter-municipal and cooperative companies to appoint at least 40% women on their boards per 2008. The law led to a fast increase from 6% women on boards of public limited companies in 2002 to

36% in 2008.[3]

[1] Löfström, Asa. Gender Equality, Economic Growth and Employment. Swedish Presidency of the European Union, 2009. Web.

[2] European Parliament, “Gender Quotas in Management Boards”, 2012

[3] Working Paper: “The Quota-instrument: Different Approaches across Europe”. N.p.: European Commission’s Network to Promote Women in Decision-making in Politics and the Economy, 2011. Web.

Counterpoint 

If there is no equal access to education and training opportunities, this measure does not address gender inequality. On the contrary, gender quotas are likely to bring inefficiencies because companies face sanctions if they do not abide by the legislation.

Introducing this legislation on the overall population of the EU rather than simply on matters regarding qualified women will introduce impediments to businesses across sectors. The EU member states uphold gender equality in the EU Charter of Fundamental Rights. Therefore, women do not face particular institutional obstacles to their employment. On the contrary, they have the legal support of the EU law.

Moreover, evidence shows the effects of quotas are distortive. In the case of Sweden, the short-term effects of quotas suggest some negative impact on firm returns. The companies had to reorganise their activities to compensate for this consequence.[1] Even in Norway, many firms changed their status (e.g. they moved to other countries) to avoid the sanctions for non-compliance while those who introduced the compromise experienced a relative decline in annual profits over assets associated with the quota.[2]

[1] Pande, Rohini & Deanna Ford, “Gender Quotas and Female Leadership: A Review” , Background Paper for the World Development Report on Gender, 2011

[2] Matsa, David, and Amalia Miller. "A Female Style in Corporate Leadership? Evidence from Quotas." American Economic Journal: Applied Economics, 30 April 2012

Title 
Quotas encourage women to pursue education and professional job positions
Point 

Quotas attempting to maximise the number of educated and skilled women in executive positions could improve corporate performance and help raise national productivity. But doing so will depend on keeping ambitious, well-qualified women moving up the management ranks. Gender quotas will encourage more women to pursue education and career options leading to the top of executive positions. Quotas create incentives for women to adapt their job preferences to the more accessible boardroom positions and develop necessary skills which would reduce the need for positive discrimination in the future. Encouraged to develop relevant skills, women will contribute to the long-term talent pool and the economy. According to McKinsey report, women’s interest in being leaders increases as they progress from entry level to middle management[1] which is exactly what the principle behind quotas aims to encourage - more women following professional career development. This is very important in the short run during which, according to research, women who have high position stimulate other women’s interest in traditionally male-dominated sectors and encourage them to pursue similar career paths.[2]

[1] Barsh, Joanna, and Lareina Yee. "Unlocking the Full Potential of Women in the US Economy." McKinsey & Company. N.p., 2011. Web.

[2] Australian Human Rights Commission, “Women in leadership”

Counterpoint 

There is no clear and conclusive statistical data to support the long-term link between quotas and women’s participation on highest executive positions. The introduction of quotas around the world has not increased the number of women on high positions in some male-dominated sectors and there is no certainty that such policy measures in the EU will change the current status quo. For example, despite the 40% increase in women in executive positions, there was no significant change in the number of female CEOs .

Moreover, there should not be a one-size fits all binding quota, but member states should come with their own rules that change gender mentality in the respective country. Gender equality and women’s choice of career have cultural and industry-specific implications which common gender quotas do not address

Title 
Quota-led gender equality in executive boards will help shape a gender sensitive and highly performing business environment.
Point 

There are many reports showing that there is a positive correlation between the number of women on high positions and the companies’ performance. A report from The McKinsey Organizational Health Index (OHI) argues that companies with three or more women in top positions (executive committee and higher) scored higher than their peers. Companies that score highly on all the OHI measures have also shown superior financial performance.[1]

This is often related to the high overall education level of women on boards. In Norway, there has been some advancement in firms’ human capital as a result of the quotas,[2] which may result in increased profits in the future due to the increasing number of well educated women.

Female managers tend to promote a communal and collaborative style of leadership that can improve a company’s performance and work culture. Organizations with women in top leadership positions are also more likely to provide work-life assistance to all employees.[3] Norwegian scholars have found that the increased number of women on boards has led to more focused and strategic decision-making, increased communication, and decreased conflict.[4] In fact, many successful business women, such as Sheryl Sandberg, also argue that more women in business could change business ethics and the male-associated image of successful business model that will bring competitive advantages to companies and thus, to the EU economies.[5]

[1] Barsh, Joanna, and Lareina Yee. "Unlocking the Full Potential of Women in the US Economy." McKinsey & Company. N.p., 2011. Web.

[2] Sandberg, Sheryl, Lean In: Women, Work, and the Will to Lead, New York, 2013

[3]  Matos, Kenneth, and Galinsky, Ellen, “2012 National Study of Employers”, Families and Work Institute, 2012, p.45

[4] Sweigart, Anne. "Women on Board for Change: The Norway Model of Boardroom Quotas As a Tool For Progress in the United States and Canada." Northwestern Journal of International Law & Business 32.4, 2012

[5] Sandberg, Sheryl, Lean In: Women, Work, and the Will to Lead, New York, 2013

Counterpoint 

It is difficult to evaluate whether a business institution change its values due to the increased number of women on board. On the contrary, companies stick to their values and hire people who behave according to them.

Also, it may be early to measure the positive impact of the quotas in Norway. A University of Michigan study found that the increased presence of women on boards in Norway led to slight losses in companies’ value.[1] One of the possible reasons is that women hired after the quotas implementation often had less upper management experience than the employees hired before that and who had to leave their posts, so companies could fulfil the quotas.

[1] Sweigart, Anne. "Women on Board for Change: The Norway Model of Boardroom Quotas As a Tool For Progress in the United States and Canada." Northwestern Journal of International Law & Business 32.4, 2012

Title 
There is no clear link between gender quota and economic growth
Point 

As Pande and Ford found in their report, countries often adopt gender quotas as a response to changing attitudes to women. However, these countries more often than not are Western advanced economies characterised by efficiency.[1] Therefore, the correlations between gender quotas and good economic performance cannot be attributed entirely to the gender equality measures.

Moreover, the competitiveness of the EU economies is damaged by domestic policies and the sovereign debt crisis which will have a larger negative impact on the European economies rather than this measure. Therefore, the expected spillover effects on the economy are unlikely to be realised.[2]

Such sceptic views on quotas when accompanied by bad economic factors are shared by international institutions like the International Labour Organisation (ILO). Breaking the glass ceiling may require affirmative action like gender quotas, but if supply-side barriers remain, even such proactive policies will not necessarily lead to the desired result of gender equality and economic advantages.[3]

[1] Pande, Rohini & Deanna Ford, “Gender Quotas and Female Leadership: A Review” , Background Paper for the World Development Report on Gender, 2011

[2] ibid

[3] Gerecke, Megan, “A policy mix for gender equality? Lessons from high-income countries”, International Labour Organisation, 2013, p.13

Counterpoint 

Gender equality in the work force will most certainly have a positive effect on the economy. The US economy would have been 27% smaller without women expanding their job share from 37% to 48% between 1970 and 2009, women went from holding 37% of all jobs to nearly 48%.[1] In addition, the economic history of OECD shows that a large proportion of post-war economic growth was due to the increased presence of women in the labour market.[2] The introduction of quotas will ensure this more skilled women working in many industries which will help these industries expand.  A study by Asa Löfström on the links between economic growth and productivity in the labour market argues that if women’s productivity level rises to the level of  men’s, Europe’s GDP could grow 27% which makes women’s participation is of crucial importance to Europe’s economy.[3] Such growth is crucial for the EU in the context of the economic crisis.

[1] Barsh, Joanna, and Lareina Yee. "Unlocking the Full Potential of Women in the US Economy." McKinsey & Company. N.p., 2011. Web.

[2] Sweigart, Anne. "Women on Board for Change: The Norway Model of Boardroom Quotas As a Tool For Progress in the United States and Canada." Northwestern Journal of International Law & Business 32.4, 2012

[3] Löfström, Asa. Gender Equality, Economic Growth and Employment. Swedish Presidency of the European Union, 2009. Web.

Title 
Public and private institutions should hire people based on skills not gender to achieve positive economic impact
Point 

Businesses advance when they hire the best person for a job who can unite people and create value. These qualities are individual and enhanced through training rather than not gender-specific. Letting both private and public companies to hire according to their needs and those who meet them is a more efficient way to ensure economic growth.

In some countries in the EU the proportion of women with relevant education is lower and such a measure will bring structural inefficiencies in the short to mid - term for the companies and the overall economy. The empirical data from Norway, for example, reveals that after being exposed to a severe limitation on their choice of directors, boards experienced large declines in value.[1] Often women hired after the quotas implementation had less upper management experience than the previously hired employees. However, since the average size of boards did not increase, male employees were dismissed and less experienced female professionals hired, so that companies could fulfil the quotas.

[1] Ahern, Kenneth, and Amy Dittmar. "The Changing of the Boards: The Impact on Firm Valuation of Mandated Female Board Representation." The Quarterly Journal of Economics, 2012.

Counterpoint 

Inefficiencies related to outcomes are not necessarily related to the quotas. There are other factors affecting a company performance regardless of changes in staff, such as the general conditions of the industry, national and world economies.  The quotas allow for flexibility in terms of technical solutions to different types of companies and ensure women candidates are successful in being selected for a certain share of eligible places. It does not aim to undermine advantages of existing decision-making, but to bring a change in the corporate world and to strengthen EU’s competitiveness by using the full capacity of its talent pool. There are more women (59%) than men graduating from European universities[1] and their talent is underutilised at high decision-making levels where they are necessary. Quotas that are legally binding will bring quick results in that regard.

[1] European Parliament, “Gender Quotas in Management Boards”, 2012

Title 
There are other policy options that are less distortive and more advantageous for the economy.
Point 

Quotas are discriminatory and could be anti-constitutional in countries like France while there are other policy instruments that could be easier to implement.

Rather than implementing quotas as a top-down approach, for example, there could be more access to capital and less regulatory obstacles for starting businesses for women. However, women in OECD enterprise account for an average 30% of all entrepreneurs and there are more self-employed or firm-owners. These gender gaps are particularly large in Ireland, Iceland, and Sweden.[1] Entrepreneurs or individuals starting up new firms are crucial to productivity in all countries. In the OECD area, the levels of entrepreneurship are highest in countries showing the fastest growth. The number of women entrepreneurs, as seen in female to male start-up ratios, is also growing fastest in these countries, which include the United States and Canada. Enhanced access to credit and less red tape for women-owned ventures is a promising source of business and job creation without the distortive effects of quotas on business competitiveness.

Other non-legislative instruments encouraging gender equality in companies are labels, awards, charter signing, and rankings.[2] They do not require externally imposed structural changes but stimulate companies to commit to gender equality in a manner acceptable to them.

Moreover, even if quotas are implemented, they should be flexible and voluntary. A one-size fits all binding quota scheme could easily harm more national economies than it would help. Even by implementing voluntary rather than obligatory quotas in addition to existing national efforts for gender equality, the EU could avoid economic distortions and constitutional complications.

[1] OECD, “Gender and Sustainable Development: Maximising the economic, social and environmental role of women”, 2008, p.35

[2] European Parliament, “Gender Quotas in Management Boards”, 2012

Counterpoint 

Binding quotas are more effective than most of the other tools, particularly voluntary quotas. Member states, however, could implement any other policy instrument they find suitable alongside the quotas. Yet, binding gender quotas bring quicker results especially in the short run. According to the a report on gender quotas published by the European Department, they are the most successful mechanism to narrow the gender gap in corporate boards and achieve the economic targets by giving the progress on women’s participation on boards. Once targets are reached, policy instruments of positive discrimination will be abolished; therefore, gender quotas are the optimal solution due to their quick effects as in the case of Norway.[1]

[1] European Parliament, “Gender Quotas in Management Boards”, 2012

Bibliography 

Australian Human Rights Commission, “Women in leadership”, http://www.humanrights.gov.au/publications/women-leadership

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