Should U.S. Follow Europe’s Lead for Gender Quotas on Boards?

There’s some big news this month on the gender-inclusion front. On March 6, Germany approved a new quota that will require some of the largest multinational companies in Europe to ensure that women occupy 30 percent of their board seats. Currently, the New York Times reports that women hold less than 20 percent of boardroom seats in Germany, which is home to corporate behemoths including BMW, Volkswagen, Daimler (the maker of Mercedes-Benz), Deutsche Bank, and Siemens.

Germany is far from the first in Europe to legislate boardroom quotas—Norway, Spain, France, Iceland, Italy, and the Netherlands have already done so, with Norway mandating the highest percentage of women on boards at 40 percent back in 2008. But many consider Germany to be the most significant country thus far to make this tangible commitment to improving women’s representation on corporate boards. The Times reported that “the measure has the potential to substantially alter the landscape of corporate governance here and to have repercussions far beyond Germany’s borders.”

The Times also noted that the trend is growing in Europe based on failure “to accomplish what has not happened organically, or through general pressure: to legislate a much greater role for women in boardrooms.” The U.S. clearly has the same situation if not a bit worse, with women’s boardroom participation stalled out at less than 20 percent for several years in a row, according to research by Catalyst.

In general, European companies are faring better than many in the U.S. when it comes to gender representation on boards. Norway, Finland, and France all have a higher percentage of women in board seats (35.5, 29.9, and 29.7 percent, respectively) than the U.S. S&P 500 companies’ dismal 19.2 percent. In fact, out of the 20 developed countries surveyed in Catalyst’s most recent census, the U.S. tied Australia for 10th place. Not very impressive.

Europe’s bold moves to institute gender quotas should serve as an additional wake-up call to those who are failing to move the needle without legislative prompting. As Fortune magazine reported in January, according to Brande Stellings, VP of corporate board services for Catalyst: “As other companies move more aggressively to get more women on boards…U.S. companies will increasingly look like laggards, and face pressure to change as well.”

Right now, I believe that U.S. organizations have a choice to get it right, which does not mean putting women in a room and trying to “fix” them. That solution has not worked for over two decades, and has kept women’s representation on boards and in senior leadership positions too low for too long.

As detailed in my latest book Make Room for Her, helping more women advance to senior leadership roles requires a three-part, integrated solution that involves organizations, men, and women all doing their part toward finding a better gender balance. In order to build a truly inclusive work environment where both men and women will thrive and be the engineers of great leadership, businesses need to leverage the broader spectrum of intelligence that not only fosters a gender balanced leadership perspective, but also yields superior business results for companies that make it work.

While many in the U.S. have continued to oppose the idea of government-mandated quotas for company boards, growth of the percentage of women in board seats has been moving at a glacial pace, which is no longer acceptable. Can U.S. companies go beyond appointing a token female to their boards—only when under fire—on their own initiative and commit to true gender parity at the upper levels? I believe it’s possible to achieve with an Integrated Leadership Model—and I also applaud the action-oriented, forward-thinking European companies that are forcing change to happen legislatively when it wasn’t happening fast enough on its own.

To learn more about how SHAMBAUGH can help you create and share your personal brand, how to build inclusive/integrated leadership within your organization, or about SHAMBAUGH’s targeted women’s leadership development programs, executive coaching, and other core services, visit www.shambaughleadership.com.

Rebecca Shambaugh is author of the best-selling books “It’s Not a Glass Ceiling, It’s a Sticky Floor,” “Leadership Secrets of Hillary Clinton,” and “Make Room for Her: Why Companies Need an Integrated Leadership Model to Achieve Extraordinary Results.”

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