Gender Quotas on Corporate Boards: Similarities and Differences in Quota Scenarios

• Date: 01 September 2020
• Author: Heike Mensi‐Klarbach,Cathrine Seierstad
• DOI: http://doi.org/10.1111/emre.12374
• Published date: 01 September 2020

Gender Quotas on Corporate Boards:

Similarities and Differences in

Quota Scenarios

HEIKE MENSI-KLARBACH

1

and CATH RI NE SEIERSTAD

2

1

WU Vienna, Vienna, Austria

2

University of South-Eastern Norway, Borre, Norway

In this article, theuse of gender quotas to strengthen gender equality on corporate boards is explored.Examining

national practices in ten European countries we provide an overview, categorizing the design of various corporate

board quotas (CBQs) and the contexts in which they are embedded. In particular, similarities and differences along

two dimensions are investigated: the design of the CBQs in terms of their hardness and progressiveness, and the

institutionalcontext in which they are embedded. From patterns of design and contextconfigurations, different quota

scenarios are discerned. We advance the discussion of female representation and the strategies of corporate boards

beyond the rather misleading dichotomy of voluntary targets versus mandatory quotas, proposing a framework for

understandingvarious CBQ designs. Moreover,we suggest that the configurationof design and institutional context,

resulting in different quota scenarios affects female representation on corporate boards.

Introduction

Women remain underrepresented on corporate boards

worldwide. Alongside major gender equality pillars such

as equal rightsand equal pay, equalityin decision-making,

includinga better gender balance in businessleadership, is

an important goal of strategies such as those implemented

by the European Union and various institutions and

countries (e.g., European Commission, 2016). Despite a

basic agreement about the theoretical desirability of

gender equality, many instances of inequality remain,

most saliently in top corporate positions. The proportion

of women at the board level is around only 23.9% in

Europe’s largest listed companies even though an array

of initiativesto remedy this situation have been introduced

in various countries in recent years (European

Commission, 2017).

Much debate has ensued over which policies or

initiatives are most likely to achieve the goal of gender

equality in top corporate positions (Klettneret a l., 2016).

Within political discussions and academic research, two

differing pathways to equality are often presented: the

radical approach and the liberal approach. The former is

concerned with outcomes (i.e., quotas), and the latter is

concerned with fair procedures (i.e., bureaucratic

impartiality) (Jewson and Mason. 1986). On corporate

boards, various initiatives have become increasingly

popular.They include quotas and soft initiatives (targets).

Klettner et al. (2016, p. 413) stated that the discussion

about quotas vs. targets revolves around this question:

‘Is it best to prescribe outcomes and force compliance,

or suggest outcomes and permit flexibility around their

achievement?’Soft approaches aim for incremental and

gradual increases in the number of women on boards

(WoB), assuming a shared desire to change the culture

©2020 The Authors

European Management Review published by John Wiley & Sons Ltd on behalf of European Academy of Management

(EURAM)

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which

permits use, distribution and reproduction in any medium, provided the original work is properly cited and is not used

for commercial purposes.

Correspondence: Heike Mensi-Klarbach, WU Vienna, Department of

Management, Welthandelsplatz 1, 1020 Vienna, Austria. E-mail: heike.

mensi-klarbach@wu.ac.atCathrine Seierstad, School of Business,History

and Social Sciences, University of South Eastern Norway, 3199 Borre,

Norway.E-mail: cathrine.seierstad@usn.no

European Management Review, Vol. 17, 615–631, (2020)

DOI: 10.1111/emre.12374

and procedures for selecting and nominating board

members (Sojo et al., 2016). The intention is to persuade

companies and keyactors to work toward cultural change

(Spender, 2012; Klettner et al., 2016). Proponents of

radical approaches doubt a shared desire and/or the speed

of change, assum ing that enforced obligation is ne cessary

to create change. Thus, the radical intervention of gender

quotas is often considered the ‘ultimate’political option

when voluntaryattempts to increase femalerepresentation

on boards fail (Grosvold and Brammer, 2011). European

countries that have introduced corporate board quotas

(CBQs) were the focus of this study.

In 2003, Norwaybecame the first countryto introduce a

CBQ, having major international impact. While CBQs

remain controversial, by the beginning of 2018, ten

European countries had introduced them,

1

although with

significant differences in design. While the

implementation of CBQs are assumed to strengthenbasic

gender equality (Seierstad et al., 2017), triggering social

and cultural change toward greater gender equality is a

complex process. In particular, change is considered a

collaborative societal endeavor, contingent upon both

broad societal support and situational ‘fit’(Burnes,

1996). Political initiatives such as CBQs are embedded

in a contextual setting that can foster or hinder success.

Moreover, the design of the laws might affect their

mandate for change (Schwindt-Bayer, 2009; Paxton and

Hughes, 2015).Thus, research suggests that CBQ designs

vary, and the contextual environments in which they

operate allude to acceptability and potential for change

(Lépinardand Rubio-Marín, 2018).Despite developments

and interest from various arenas, knowledge of the CBQs

in Europe is marginalbecause comprehensive,systematic,

and comparative studies are lacking (Hughes et al., 2017;

Kirsch, 2018).

Hence, in this paper, the CBQs introduced in ten

European countries were explored, aiming to provide a

systematic understanding of those CBQs. Their design

and content were analyzed for hardness (enforcement

and precision) and progressiveness (year of acceptance,

implementationschedule, quota target,requested increase,

duration, and scope). Moreover, the specific institutional

contexts (gender equality, history of interventions, and

political support) in which the CBQs were embedded

were explored. We suggest that configurations of CBQ

design and the institutional context result in differing

quota scenarios, affecting the potential for increasing

female representation on boards and beyond.

Subsequently, new insights into the transformative

potentialof CBQs are introduced, and wepropose that this

potential dependson the countries’respective designs and

contexts. The discussion of board initiatives is advanced

beyond the rather misleading dichotomy of voluntary

targets vs. mandatory quotas, and we propose a

framework for understanding the designs of various

CBQs.

Thus, we respond to calls for further comparative

studies through assessments of CBQ variations (Kirsch,

2018), calls for understanding quota initiatives and the

contexts in which they are embedded (Krook, 2007;

Dahlerup and Freidenvall, 2010; Terjesen and Sealy,

2016), and calls for research to explore the link between

WoBs, CBQs, and potential wider equality reach (Kirsch,

2018).

Theoretical background: conceptualizing and

contextualizing quota laws

Since the early 2000s, studies have focused on WoB and

the use of policy interventions (Terjesen et al., 2015;

Terjesen and Sealy, 2016; Kirsch, 2018). This research

has received increased attention from various disciplines

in academia (e.g., business, finance, political science,

and sociology)and in business and politicalcircles at both

national and sup ranational levels. As highlighted by

Kirsch’s (2018) comprehensive review, a recent stream

of WoB research has highlighted regulation of board

gender composition, which tends to follow one of two

courses. One focuseson antecedents of regulations,which

often examines institutional and cultural contexts (e.g.,

Terjesen et al., 2015) or the influences of actors (e.g.,

Seierstad et al., 2017); the other focuses on the effects of

regulations on firm outcomes, primarily economic

performance outcomes, which has revealed inconclusive

results (see Kirsch, 2018). However, few studies focus

on CBQ use, design, and impact. This research area is

considered to be in its ‘infancy stage’(Hughes et al.,

2017, p. 346)and is dominated by country-specific studies

building on descriptive and/or secondary data (Terjesen

and Sealy, 2016; Kirsch, 2018).

Design of corporate board quotas

A quota is often seen as the ultimate option when

voluntary attempts to increase WoB have failed.

However, quotas—whether CBQs or quotas in the

political arena—are often used without a clear

definition (cf. Klettner et al., 2016; Spender, 2012)

and can be considered a ‘fuzzy’concept that is

differently understood and adopted.

Hardness. Klettner et al. (2016, p. 413) argue that the

debate on interventions to foster genderequality on boards

can be reduced to ‘the long running regulatory debate of

1

These are: Norway, Spain, Iceland, France, Italy, Belgium, the Netherlands,

Germany, Austria and Portugal. The Dutch CBQ expired in 2016; however,

the Parliament passed a bill that foresees legal targets in a two-stage period:

20% by 2019 and, if met, 30%by 2023; if not met, sanctions will be imposed

in 2019 (Kruisinga and Senden, 2017). Because of the legal nature of this

target, we continue to consider it a CBQ (recently, as of December2019 (after

the acceptanceofthis article), steps have been takenby the Dutch Government

to harden the quotafrom 2020).

©2020 The Authors

European Management Review published by John Wiley & Sons Ltd on behalf of European Academy of Management

(EURAM)

616 H. Mensi-Klarbach and C. Seierstad