Despite the large amount of attention by politics and gender scholars to analyzing gender parity in political representation and the impact of the increasing participation of women in electoral politics, little attention has been paid to women's participation in the governance of the economic sphere nationally or globally. Yet men overwhelmingly dominate economic decision-making positions, such as those on corporate boards, as business executives, government financial regulators, trade negotiators, and central bankers around the world.
In politics and economics, “gender balance” in participation is the new mantra for good governance and competitiveness as revealed by the sophisticated Global Gender Gap index (World Economic Forum 2011a). The gender gap in the governance of corporations was first researched in 2011, yet this is a critical realm of global power and glaring gender imbalance (World Economic Forum 2011b). Since the beginning of the globalization era, power has increasingly shifted away from the legislatures of the state toward a range of private actors. These days, corporations behave more like states, building corporate patriotism, emphasizing their value to society by addressing causes such as poverty eradication, environmental sustainability, human rights, gender equality, and delivering welfare services, while states behave more like traditional corporations, branding themselves, using business speak, downsizing, and privatizing (see True Reference True, Phillip and Payne2013).
Counting women matters more now than ever before for both states and corporations. The impetus to increase women's participation in public and private governance has become a global movement. Sparked by statistical evidence revealing the paucity of women on corporate boards and as management executives, as well as in state legislatures and political leadership positions, the movement has rapidly spread over the last decade, but especially since the global financial crisis, with calls to rebalance the economic sphere by gender-balancing decision making (see Bouchet and Isaak Reference Bouchet and Isaak2011; Prügl Reference Prügl2012).
This essay assesses some of the successes and failures with efforts to increase women's participation, especially in corporate governance, a new area for gender-sensitive research and advocacy. It considers the lessons learned from gender and politics scholarship for the economic realm and asks how gender balance in economic decision making might bring about changes in economic, social, and political outcomes for women.
MAKING WOMEN COUNT: SUCCESSES AND FAILURES
Women's participation is far more amenable to measurement, monitoring, and evaluation than are the other international strategies, such as gender mainstreaming and human rights designed to bring about gender equality. As a result, the strategy of increasing women's participation has had considerable traction transnationally.
The 1995 Beijing Platform for Action calls on a range of actors to encourage women's active participation in all types of social, economic, and political decision making, including through the strategic use of positive action (paragraphs 189, 192, 194). The Platform for Action defines “women's participation” in terms of a specific target of 30% women (paragraphs 184 and 189) and focuses, albeit not exclusively, on political representation. But by 2010, at the Beijing +15 review, little progress had been made. In 2012, almost 120 years after women first achieved the suffrage in a nation-state (New Zealand), women's proportion of legislative seats has reached just 20% globally (see www.ipu.org). We could see this as either a success or a failure depending on our expectations of the timeframe for progress in women's political participation. If we adopt the glass is half full—rather than half empty—approach, then we can take heart from the spread of the gender quotas movement. The UN has attributed “increases in the proportion of positions held by women in some countries” to “affirmative and positive action policies, including quota systems or voluntary agreements … and measurable goals and targets” (UNGA Resolution S-23/3, 2000, paragraph 22).
Political strategies for advancing women's participation have diffused from the realm of politics to the realm of economic power with respect to the governance of corporations and from Europe's former colonies in Latin America and India to metropolitan Europe itself (Towns Reference Towns2012). They have also diffused from the national level to international politics with campaigns to appoint a female UN Secretary-General and the like (e.g., Chowdhury Reference Chowdhury2011), United Nations Security Council mandates to increase women's presence in peace negotiations and security decisions, and calls for gender balance in the world of global finance from the trading floor to the boardrooms of investment banks and financial regulatory authorities.
Gender quotas adopted first in electoral politics (see Krook Reference Krook2010) are now being designed to bolster greater gender-balance in economic decision making from board level to global governance. More equal representation of women at the top is expected to deliver better results for citizens, states, employees, and shareholders alike. Policymakers and feminists agree that we need “concrete measurables” to improve government and business accountability. Meanwhile many governments and corporations are persuaded by the empirical studies that associate greater gender balance in decision making with enhanced competitiveness and growth, return in sales, and investment and equity (Daly Reference Daly2007; Goldman Sachs 2009; Joy et al. Reference Joy, Carter, Wagner and Narayanan2007; McKinsey and Company 2007; World Economic Forum 2011a). The issue of gender gaps and numerical quotas or targets to address them, especially with respect to the economy, is almost never off the front pages of financial newspapers these days. States are under pressure to adopt affirmative actions and have introduced—or threatened to introduce—mandatory regulation of business performance on gender equality.
A WOMAN'S PLACE IS IN THE BOARDROOM?
If we look to the economic realm, the pace of change made in the last decade toward achieving 11%, on average, participation of women on corporate boards across countries from a very low base has been rapid compared to the more than a century it has taken for women to attain 20%, on average, in parliaments globally (Gladman and Lamb Reference Gladman and Lamb2013). Moreover, the growth of transnational research, networking, benchmarking, and measurement around women on boards has been phenomenal. This knowledge generation has played a major role in promoting policy learning and experimentation by governments, regulatory bodies, and corporations on how to increase the supply and visibility of qualified women in corporate governance, as well as the demand for gender equity and balance in the business world.
The proportion of women on corporate boards is now globally monitored as an indicator of the progress of women and gender equality. Much of the academic and public media discussion has focused on Norway's adoption of mandatory gender quotas for public boards in 2004, which extended to private boards in 2008. Certainly, Norway's success in increasing women's presence on boards from 6% in 2002 to more than 36% in 2011 is breathtaking—although falling slightly short of the 40% quota—and worthy of analysis. Since Norway's 2006 reform, six other countries (Sweden, Denmark, Finland, Spain, the Netherlands, and Italy) have followed suit, introducing quotas for corporate boards. But these countries often require firms to “comply or explain,” as opposed to issue mandatory laws like that of Norway.
Just as there is an array of types of quota systems to promote women's political representation—such as candidate quotas or quotas within political parties, mandatory legislative quotas for all parties, or a designated number of reserved seats set aside for women (Krook Reference Krook2010)—quotas have not been the only approach to increasing women's participation in corporate governance. Some countries have set indicative targets for women on boards to be reached by both public and private corporations. In New Zealand and Australia, these targets have been remarkably successful in achieving high levels of women in public-sector executive and governance positions (Vinnicombe et al. Reference Vinnicombe, Singh, Burke, Bilimoria and Huse2008). New Zealand introduced a 40% target for the governance boards of “crown entities,” including state-owned enterprises, in 1998 at the initiative of Prime Minister Jenny Shipley after the Beijing conference. Enormous energy went into meeting the 40% target with significant arms of government agencies devoted to managing a registry of qualified women available to sit on public boards and the provision of gender-specific directorship courses and an active lobbying group (New Zealand Human Rights Commission 2011). These public-sector-only initiatives, however, have not transferred to the private sector, despite the supply problems of female directors with suitable education and experience having being solved (Hawarden Reference Hawarden2010).
By contrast, Belgium, Malaysia, and the United Kingdom (UK) have all adopted targets for increasing women on corporate boards. The Belgian parliament passed a law in 2011 that sets a 30% target for women and men on all boards, including in the private sector, to be complied with within two years. Malaysia, the first country in the East Asian region to do so, has also set a target of 30% women in boardrooms to be achieved within five years (Deloitte Center for Corporate Governance 2011). In the UK, a Government Review chaired by Lord Davies in 2010 established a 25% target of women on corporate boards to be met by 2015 (Women on Boards 2011).Footnote 1 In one year, this target produced a sizeable increase in the women on the boards of the FTSE 100 from 12% to 15.6%. At that pace, it could rise to 26.7% by 2015, and 36.9% by 2020, exceeding Lord Davies’ target (The Telegraph, March 13, 2012). Following the advocacy trend that has been critical to successes in advancing gender quotas in the political realm, a new lobby group, “the 30% Club,” has emerged in the UK and the United States, to drive efforts to increase women in management and boardroom positions. This focus on the 30% threshold was inspired by the research of a U.S. private think tank, Catalyst, showing increased financial returns when three women are present on the board of a firm (Joy et al. Reference Joy, Carter, Wagner and Narayanan2007).
Yet another approach to increasing women in private-sector governance has been to require companies to report publicly on the presence of women in their senior management as well as on their executive boards. The Australian Securities Exchange (ASX) (2010) adopted such an approach in 2010 with new corporate governance guidelines. The ASX requires listed companies to adopt and disclose diversity policies, including the number of women on their boards and in senior management, and to report annually on these measures. By 2011, the average proportion of women on boards for all ASX companies rose from 8.7% to 13.8% (and 18.7% in the top 50 ASX companies) with one in three new appointees to boards being women compared to 1 in 20 in 2009 (The Australian, March 8, 2012). This represents a 59% increase in just one year, notwithstanding the 64 ASX companies that still have all-male governance in Australia. In July 2012, the New Zealand Exchange announced that it is adopting a “diversity rule” for all listed companies that directly emulates the Australian regulatory model.Footnote 2 In the economic decision-making realm, the competitive pressures of market integration and shareholder activism make it almost certain that institutional isomorphism will expeditiously occur between proximate countries and states pursuant to regional free trade agreements.Footnote 3 This is precisely the policy diffusion process that ensued in Scandinavia with respect to mandatory corporate board quotas after Norway's first mover law reform.
A comparison of the three types of policies—quotas, targets, and reporting systems—shows that only quotas have a decisive impact on the proportion of women on boards. Of the 45 countries on which data are available, 12 have some kind of affirmative action to increase the proportion of women on boards. But only the six countries with quotas have statistically significant representation above 10% women on boards (with an average proportion of 22%).Footnote 4 In the 39 countries without quotas, the average proportion of women on boards is 8%.Footnote 5 In contrast, non-binding target and report (or explain) policies have limited substantive impact. For the three countries with report or explain policies (Australia, Austria, and Denmark), all have above 10% proportion of women on boards, but the average difference is not statistically significant. The impact of targets is even more limited. Thus, while the jury is still out on the impact of the soft accountability approach to increasing women's participation on corporate boards, quotas are clearly successful in increasing the descriptive representation of women on boards.
TRANSFORMING ECONOMIC POWER
Scholars of gender and politics do not assume that there is a one-to-one relationship between advances in women's leadership and political rights and progress in women's economic and social status. The presence of women in local government, state, and national legislatures and in executive positions in diverse countries has been shown to increase female voters’ turnout and political participation, the inclusion of gender-awareness policy agendas, and greater public service responsiveness to female citizens (see Burns, Schlozman, and Verba Reference Burns, Schlozman and Verba2001; Htun and Jones Reference Htun, Jones, Craske and Molyneux2002; Lakshmi et al. Reference Lakshmi, Mani, Mishra and Topalova2011). Current scholarship on “critical mass” in gender and politics, however, is skeptical of the theory that women-friendly policies can only be achieved through coalitions of female representatives once women have reached a certain numerical level in legislatures. Indeed, this research suggests that the backlash against women and women-friendly policies may increase as the number of women rises and that a skewed gender balance or a few outstanding female leaders as role models may achieve similar or better results for women than any “critical mass” (see Beckwith and Cowell-Meyers Reference Beckwith and Cowell-Meyers2007; Childs and Krook Reference Childs and Krook2007). Certainly, there are some striking examples of female leaders catalyzing change for women in general. Michelle Bachelet, as the first female president of Chile, appointed 50% women to her cabinet and introduced a widespread, state-funded childcare system. Hilary Clinton, as United States Secretary of State, made empowering women in developing countries one of the six key principles of U.S. international development policy (Clinton Reference Clinton2010). Gender and politics researchers also observe that gender differences in policymaking may actually disappear as gender balance is reached (Bratton Reference Bratton2005).
These findings suggest that we need to monitor closely the impact of affirmative actions to increase women on boards and other positions of economic power. While attention to women's participation in governance marks significant progress in the acceptance of gender equality as a societal, even global, value, initiatives to address gender imbalances in governance need to demonstrate their import for improving outcomes for citizens, not always reflected in macro indicators of growth or investment return, if they are to be sustained.
