The maths of equality: An analysis of diversity quotas in the boardroom and beyond

This month the Netherlands introduced a quota system to ensure major businesses employ more women. The new law requires listed companies to have women make up at least a third all their supervisory boards. Another 5,000 Dutch companies will have to demonstrate the ways they are putting ‘appropriate and ambitious’ measures in place to increase female leadership. Sanctions will be imposed if these new obligations are not heeded.

The conversation surrounding gender quotas, and more broadly, diversity quotas of all forms, has been taking place for some time. But to what extent are diversity quotas really positive? Are they an effective tool to achieve equality, or do they actually represent a serious hinderance?

At the current rate, it would take North America thirty years to achieve 30% female representation on boards of directors. Therefore, if we want to see more women entering the boardroom and being promoted to senior roles, a more direct approach may have to be taken. Those who advocate for quotas as a means of seeing this achieved argue that compulsory targets are the only way to ensure businesses stick to their promises; advisory goals are proving too slow, so new laws may be the best way to speed up the process.

Many point towards countries where quotas are already in place. For example, surveys generally show that in the US and Europe, there is much less hostility toward quotas in countries that have them, compared to those that don’t. In other words, those who were unfamiliar with quotas were much more likely to think they were a bad thing. For example, directors in the Norwegian companies interviewed had strongly opposed quotas, but once they were imposed on them by the government, the directors eventually altered their views. According to them, their initial fears were unfounded, and, after a period of transition, they felt that the increased representation of women on boards actually improved overall governance and decision making.

However, for every proponent of diversity quotas, there are those who share serious concerns about the consequences of such laws. Nobody wants to be defined purely by their gender, race, or sexuality – to focus wholly on such identifiers in any situation is wrong. So why should it be acceptable to promote people based only on their gender, race, or sexuality? Most people would hate to think that they achieved their job because of a characteristic that they cannot control. Moreover, why should a highly skilled man lose out on a job to a slightly less skilled woman, simply because he is a man?

One interesting caveat of the new law in the Netherlands is that just as certain companies must have women making up a third of all their boards, a minimum of a third of these boards must also be made up by men. Therefore, if a board has ten members, and the top ten candidates are all women, under the new law four of those women will be refused a job in favour of a man. It will not matter whether the men are less qualified to sit on the board; their gender alone is the reason for their promotion. If you swap the genders in this scenario, the blatant sexism is still apparent, and therefore it is evident that diversity quotas can themselves be discriminatory.

One demographic that is repeatedly excluded by diversity quotas is class. The UK government, for example, has never been more diverse in terms of race, and there are increasing numbers of women entering parliament. However, the current cabinet is not a reflection of Britain today, largely due to the evident class divide. Two-thirds of cabinet members were privately educated, compared with just 7% of the general population, and almost half attended either Oxford or Cambridge. The fact that one of four Old Etonians in the cabinet, Kwasi Kwarteng, is black, might make it more ‘diverse’, but it is hardly promoting better access for those who really need it. If we are really concerned about giving sections of society extra support, class would arguably be a better place to start.

It has long been argued by certain feminists that boards made up entirely of women would be the ideal scenario. For example, Christine Lagarde, the president of the European Central Bank, ironically famed for her own past poor financial management, has repeatedly stated that if it had been Lehman Sisters instead of Lehman Brothers, the 2008 financial crash would not have happened. But why? Is it because woman are more cautious, more intelligent, than men? If one therefore accepts that woman inherently possess certain qualities that set them apart from their male counterparts, it must also follow that the opposite is true, and that men are naturally more competent than women in other areas. As a result, one cannot argue at the same time that a system of quotas, that ignores these inherent characteristics, is the best thing for our society. You either argue for a system based on gender, or for a system based on abilities; you cannot assert that some people are better at a certain job than others, whilst simultaneously introducing a quota that would see them fail to get that same job, because of their gender.

There are indeed some positives to these measures, and it is important that businesses ensure that people are not prevented from achieving their potential because of any uncontrollable characteristic. Nevertheless, Martin Luther King spoke of a dream that his children ‘will one day live in a nation where they will not be judged by the colour of their skin, but by the content of their character’. Diversity quotas appear to do the opposite; they judge people by the colour of their skin (or their gender or sexuality) before considering the content of their character. As a society, we must decide whether this subversion of King’s dream is worth it in the long term.

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