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India’s gender quota for boards has led to troubling trend

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Hello, Broadsheet readers! Janet Yellen speaks on the stimulus checks, The WNBA outperforms all other U.S. sports leagues in diversity, and we’re diving into new onboard quota data. Have a good Tuesday.

– On the key, at the edge of the key. Gender quotas for boards are a commonly used tool in the pursuit of gender diversity. Norway started the movement in 2003 with a 40% quota for women on boards of directors, and since then countries like Spain, Israel, Kenya, Portugal and Germany have followed suit with their own quotas. California in 2020 became the first US state to adopt a threshold for representation of women in the boardroom.

With each new law, the same questions arise: will the women who will occupy the reserved seats be qualified for their roles or will they be “symbolic” appointments? Will the same women be chosen over and over again for board positions, undermining efforts to foster diversity of ideas?

These questions arose when India introduced its quota – at least one woman per council – in 2013, and new research published in the harvard business review said the result avoided those worst case scenarios.

When Indian law came into effect, 61% of India’s 500 largest companies (in terms of market capitalization) did not have a female director. Four years later, 83% of non-compliant companies had added an administrator; 14% had added two or more women. And researchers at the Northeastern University and Aarhus University in Denmark found that unlike Norway, where several administrator positions were initially awarded to a small group of prominent women, board seats in India were better distributed. In addition, the researchers found that 70% of women appointed to all-male boards were women who were either “ independent ” or not from the female company directors or linked to the majority owner.

Along with these positive results, the researchers found a disturbing trend: although newly appointed female directors were more educated and likely to have more political experience than their male counterparts, they were less likely to be appointed to major committees. of counseling, even when researchers vetted for previous counseling experience.

“By excluding new independent women board members from the most influential committees, male-dominated boards were able to limit the extent of governance reform in their internal processes,” the study said.

It’s a reminder that for diversity efforts to reach their goal, they must add new voices to decision-making processes, going beyond the extent to which a board, management team or a workplace complies with a surface initiative.

Claire Zillman

Today’s Broadsheet was organized by Emma Hinchliffe.

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