Darren Rosenblum is a Professor of Law at Pace Law School. He practiced international arbitration at Skadden, Arps, Slate Meagher and Flom LLP and at Clifford Chance LLP in New York from 1998-2004. Darren’s scholarship focuses on comparative corporate governance and international gender equality, and he (together with Daria Roithmayr) has been interviewing board members in France about their views on gender diversity and quotas in the boardroom. One of the things that I find quite striking is the similarity between Darren’s interviews with French board members and our interviews with US board members, despite differences in law, culture, business norms, and gender norms across the two countries. Hopefully, this is something that Darren and I can explore in our mini-symposium this week.
Darren’s post is below.
Thank you to Kim Krawiec for pulling together what we hope will be a great conversation about a crucial topic. I have spent the past decade, on and off, focusing on sex quotas, both those for political representation and corporate governance. This first post will highlight some of the conclusions of this work, including the most recent piece, co-authored with Daria Roithmayr, More than a Woman: Insights into Corporate Governance after the French Sex Quota, which draws on interviews of men and women board members of a third of France’s CAC 40 firms.
Thinking about quotas must be a comparative endeavor given their remarkable popularity outside the United States. Over one hundred countries have some form of political representation quota, such as France’s Parity quota, discussed in my article here, as countries around the world internalize international sex equality norms, as I argued here. More recently, we are seeing a wave of corporate board quotas. Even Germany, a long-standing opponent to such quotas, adopted a quota requiring 30% of board members to be women.
Although many in Europe presume the benefits of quotas, the notion that women’s presence will prove good for growth lacks conclusive proof. Some studies, such as the one conducted by Credit Suisse study, find this to be the case; others take the opposite view. While such studies proliferate, I find myself skeptical of these “business case” arguments, principally because of the weak link between board deliberations and corporate success and whatever it is that we presume women bring to the table.
I’m also skeptical about quotas because of the way they assume that gender comes in binary form. This binary approach overlooks the complexity of how gender is lived. Finally, I am skeptical about quotas because they come with substantial costs for men and other sexes, and possibly even for firms who wish to choose people who may not fit within the quota. Men lose their board slots, and the opportunity to join boards as boards ask women to occupy those seats. The quota’s binary reinforces a notion of sex difference, whereas interviewees reported that men and women in the board context were more similar than different. On the other side of the equation, quotas benefit mostly elite women and not broader populations.
Notwithstanding my skepticism, two arguments surface to justify quotas: an egalitarian justification and a market justification. First, with regard to equality, quotas are designed to put into action the idea that the law should be devoid of “fixed notions concerning the roles and abilities of males and females.” Mississippi University for Women v. Hogan(1982). Quotas close sharp disparities between men and women that persist despite decades of educational equality. They might also help to erase the family/market distinction, as I argued in Feminizing Capital: A Corporate Imperative, a dichotomy that has awarded men the public sphere of the market as it relegated women to the private sphere of the family. When gender balance exists in all areas of life, these fixed notions—male vs. female, market vs. family – might finally begin to disappear, as I argued in Loving Gender Balance. Corporate quotas might even serve to advance an unsexed vision of the family, as I described here.
Second, quotas are also supported by a market justification. Quotas offer firms a unique chance to remake the board’s membership. Here, the quota acts as a term limit, allowing firms to benefit from new and perhaps more innovative blood. So for example, French firms under the quote have been choosing foreign women who “kill two birds with one stone,” globalizing the firm while complying. Indeed, as Daria Roithmayr and I argue in More than a Woman: Insights into Corporate Governance after the French Sex Quota, quotas might work to improve performance not because of gender but because of the opportunity to include outsiders—people who specialize in labor or environment, or come from outside the club of the Grandes Ecoles, the small network of French universities that creates the French elite. Bringing these outsiders on board might give rise to even greater stakeholderism in Europe, or what Veronique Magnier and I described as a Transatlantic Divergence of Corporate Governance.
Over the next few days, I’m thrilled that we will explore these questions together, as well as other, new avenues of inquiry on quotas and other diversity efforts.
The “What’s The Return On Equality?” Mini-Symposium: