How corporate America got DEI wrong

More on corporate DEI post-Trump:

The “ethical case for diversity” is stronger

Still, Bermiss and others point out that DEI policies can have significant business impacts, even if they’re not apparent in short-term financial results. Having a more diverse team can help create products that appeal to more consumers, or help employees feel more satisfied with their jobs.

Costco, for example, recently told investors that its DEI efforts “help bring originality and creativity to our merchandise offerings” and “enhance our capacity to attract and retain employees who will help our business succeed,” among other benefits.

The massive retailer, which also calls DEI part of its “code of ethics,” successfully brushed off an anti-DEI shareholder proposal last month. Meanwhile, JPMorgan Chase CEO Jamie Dimon, who runs the nation’s largest bank, has called DEI “good for business; it’s morally right; we’re quite good at it; we’re successful.”

It probably helps that both JPMorgan Chase and Costco are financial powerhouses, whose profits and share prices keep their investors happy. But both companies are also framing their DEI policies as a matter of morality or ethics, rather than just profits.

That’s exactly how more companies should be thinking about DEI, according to Bermiss — if (and only if) they see it as valuable. Bermiss acknowledges that not all companies will want to continue pursuing greater diversity, equity, and inclusion. But he argues that if business leaders decide that pursuing such workplace goals is morally right and aligned with a company’s values, then they’ll be better able to stand up to criticisms or attacks.

And, as he adds, that’s firmer ground than hoping that “if we get two more Latinos on the board, our stock price will go up.”

Some DEI work will continue — by any other name

Despite the ongoing pressures, Costco and JPMorgan aren’t the only employers still spending money on DEI. In fact, some companies are ramping up: Paradigm, a tech consultancy that advises employers on diversity and inclusion, says it saw a 12 percentage-point increase last year in how many of its customers had dedicated DEI budgets.

Paradigm CEO Joelle Emerson says that even companies that are ending DEI programs may rebrand the work rather than abandoning it altogether. Corporate America’s diversity results have been “a mixed bag,” she adds, “in part because companies often spent too much time and energy on initiatives that didn’t have a measurable impact.”

Now she’s hoping that employers are taking the time to create more thoughtful — and effective — programs to increase fairness.

“I see this less as a rollback of DEI and more as sort of an evolution to the next phase of this work,” Emerson says.

Many of the companies ending DEI programs are scrubbing the now-politically-toxic acronym from their websites and corporate statements. But their public statements insist that they still want to make everyone feel included.

That could be a tricky balance, especially as the Trump Administration continues ramping up attacks on DEI — including efforts to uncover rebranded diversity efforts inside of federal agencies.

And it remains to be seen whether corporate America can really be more effective while softening its language — and goals — around diversity, equity, and inclusion. But Emerson, at least, is bullish.

“I’m actually pretty optimistic about the future of this work,” she says. “I’m not optimistic about the acronym DEI — nor do I particularly care.

Source: How corporate America got DEI wrong

Corporate DEI initiatives are facing cutbacks and legal attacks

Of note:

Just three years after the murder of George Floyd in Minneapolis set off a torrent of hiring of chief diversity officers and other such roles, companies are coming under attack from conservative legal activists who argue that their DEI policies and programs constitute racial discrimination.

The challenges come as companies, faced with an uncertain economy, have already been laying off large numbers of people, including many only recently hired to implement their diversity, equity and inclusion (DEI) strategies.

The one-two punch has legal experts split on what’s ahead for these efforts, while longtime diversity advocates argue that companies should take these setbacks as an opportunity to reset.

“We cannot place the reasoning for it on something as subjective as the right thing to do. It has to be the smart thing to do,” says Janet Stovall, global head of diversity, equity and inclusion for the NeuroLeadership Institute, a consulting firm focused on culture and leadership.

A surge in hiring, followed by dramatic cuts

In the corporate DEI world, Catalina Colman’s story is a familiar one.

In 2020, she was working at a small tech company as a human resources generalist, handling tasks such as employee onboardings and exits.

She had already been thinking about how to help the company grow in a more diverse and equitable way, when in May of that year, George Floyd was murdered. Suddenly, everything accelerated.

“We recognized we just needed to move quickly, and we needed to start implementing things fast,” says Colman.

The racial reckoning unfolding across the country unleashed demands for change. Companies scrambled to respond to the moment. According to the jobs site Indeed, job postings with DEI in the title jumped 92% from July 2020 to July 2021.

But the deceleration has also come quickly. Economic pressures have led companies to pull back, cutting DEI jobs including Colman’s alongside other human resources roles. Since last July, Indeed has seen DEI job postings drop by 38%.

And then in June, in another blow to diversity advocates, the Supreme Court rejected the use of race-conscious admissions in higher education, setting off predictions that corporate policies around diversity will soon meet the same fate.

Predictions of what’s next for corporate DEI

To be clear, the court’s decision applies to affirmative action at colleges and universities, not employer efforts to foster diversity in the workplace.

In a statement issued after the ruling, Charlotte Burrows, chair of the Equal Employment Opportunity Commission, wrote, “It remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.”

But in a Bloomberg opinion piece, Harvard Law professor Noah Feldman cited Justice Neil Gorsuch’s concurring opinion, in which “he made it crystal clear that in his view, the court’s rule that an educational institution ‘may never discriminate based on race’ now applies with equal force to employers.”

Feldman told NPR the writing is on the wall.

“There’s a high probability, a very high probability, that a majority of this current Supreme Court will say the exact same thing,” he said in an interview last month.

But other attorneys say such assumptions are premature. Bonnie Levine, founder of the law firm Verse Legal, points out that a day after the affirmative action decision, the Supreme Court ruled that a Christian wedding website designer could refuse to work with same-sex couples.

Source: Corporate DEI initiatives are facing cutbacks and legal attacks

If Corporations Really Want to Address Racial Inequality, Here Are 9 Things That Actually Make a Difference

A few articles of interest regarding racial inequality and options to address it. While largely focussed on Black inequalities and disparities, broadly applicable to most minority groups.

Starting with the most concrete by Darren Walker, the president of the Ford Foundation. While some of the recommendations pertain to the private sector, some are more broadly applicable:

Since protests over the killing of George Floyd erupted across the country, I’ve received numerous calls from corporate CEOs who want to know what they should do, and where can they quickly donate $10 million dollars to advance the cause of racial justice?

The first thing I do is remind them of Martin Luther King Jr.’s caution that philanthropy must not be used to obscure the economic injustices that make it necessary. The frustration and rage we’re seeing across the country aren’t just about a racist system of policing.

It’s also about original sins–a genocide of Native Americans and enslavement of Black Africans whose stolen land and labor built this country’s wealth, enriching countless white people and their descendants in the process. It’s about the predations of modern-day capitalism that have allowed a privileged few to hoard the lion’s share of the nation’s wealth, effectively consigning Black folks to the bottom rung of the economic ladder.

This time the usual corporate playbook–issue a statement, gather a group of Black leaders for a conference call, give a hefty grant to the Urban League, resume business as usual–isn’t going to work. Here are 9 things every corporate leader can do to improve Black lives.

1. Remake your C suite

Change starts at the top. Do you have African-American board members? Black executives in your leadership team? If you do, are they token appointments, or do they have real power to recommend changes that would make your company more racially equitable?

2. Hire and advance more Black people

As leaders of large corporations, you have the power to transform Black lives immediately, simply by hiring and promoting more of us. Blind tests show that when identical resumes are submitted for the same job – one with a white-sounding name, the other with a Black-sounding one – the white applicant receives a callback 50% more often. Taking racial inclusion seriously means telling your managers that they cannot go forward with a hire or a promotion, at any level, unless the candidate pool is racially diverse.

3. Get involved in the Fair Chance Hiring Initiative

One legacy of the “tough on crime” era is that about one-third of American adults now have a criminal record, mostly for minor crimes that nonetheless hamper their ability to get a job. Black people are hugely overrepresented in that group, in significant part because of the kind of over-policing that sparked today’s protests.

That’s why the Society of Human Resource Management has urged employers to take the Getting Talent Back to Work Pledge as part of the Fair Chance Hiring Initiative by employing qualified job applicants with criminal backgrounds. Five years ago, the Ford Foundation committed to hire 10 formerly incarcerated business associates every year, and they are among our most dedicated employees.

4. Pay your employees a living wage

The federal minimum wage–$2.13 per hour for tipped workers and $7.25 per hour for others–is not a living wage. In 2016, nearly half of government public assistance went to people who worked full-time but still fell below the federal poverty line.

Black workers make up about 11% percent of the workforce, but 38% of Black workers who now work for the minimum wage would get a raise. Raising the pay of the workers at the bottom of your scale would disproportionately help people of color.

Commit to paying your workers a living wage of at least $15 per hour, and more in higher-cost parts of the country.

5. Provide a safe and healthy workplace

Valuing Black lives in a pandemic also means doing everything possible to create a safe workplace. Lack of adequate health insurance coverage are big reasons Black, Latinx and Native American people have contracted the coronavirus at a disproportionally higher rate than white Americans, with Black people dying of COVID-19 at a rate of almost 2.5 times the rate of white people. Does your company manipulate the schedules of your workers to fall just below the threshold for health coverage? Does it label people independent contractors even if they spend the bulk of their days working for you? If so, this is what advocates mean when they talk about structural racism.

6. Provide paid sick and family leave

Black workers often cannot afford to take time off to care for a newborn or sick family member. The lack of paid sick leave is another reason so many people of color have suffered higher rates of illness and death from COVID-19. If there were ever a question about whether paid leave is a moral issue, the pandemic should have laid it to rest.

7. Reconsider executive compensation

You might be asking, “but where am I going to find the resources to give my workers more?” Here, CEOs would do well to look in the mirror. According to the Economic Policy Institute, CEO compensation has grown 940% since 1978, while the salary of the average worker has increased only 12%. The economy would suffer zero harm if CEOs were paid less.

We know this, because many of those same executives are steering their excess wealth into philanthropic foundations, which have proliferated in the past two decades as their compensation has skyrocketed. While that charitable instinct benefits some of my foundation’s favorite causes, it would be better for the economy and for racial equity if more of that largesse were directed toward workers.

8. Advocate for a more progressive tax code

Standing up for Black lives means investing in the essential building blocks of social equality, from adequately funded schools to universal health care and affordable housing. These things require government action at scale.

Moving money from police budgets should be just the start. What we really need is a progressive tax code that will reduce income inequality, shore up our crumbling infrastructure, create a proper public health system and provide the social safety net that people need in a crisis. Five months into a pandemic that has shuttered the economy, Canada is subsidizing wages at 75% of full salary, while Americans are left to queue at food banks, wondering whether the next unemployment check will be their last.

Instead of deploying your lobbyists only on issues of narrow self-interest, detail them to advocate for tax reform and the expansion of social programs for poor people.

9. Advocate for shareholder reforms

But I hear you saying, “I have public shareholders to whom I’m accountable. Supporting tax policies that work against my company’s bottom line will only drive down our share price.” Yes, and this is why the current model of shareholder-driven capitalism that puts quarterly profits over people is bad for the long-term social and economic health of the country.

The Business Roundtable acknowledged as much last year, when 181 CEOs signed a statement revising the purpose of a corporation as one that benefits customers, employees, supplies and communities – not just shareholders. This was an important first step. Now, companies must turn that resolution into action, by committing to the kinds of tangible changes in practice and policy that will reduce inequality.

The uncomfortable truth is that if what you’re changing in your corporate practices doesn’t affect your bottom line, you’re not doing enough.

So to my friends in the Fortune 500: while the millions in onetime donations are appreciated, a permanent commitment to reducing racial inequality through changes in your own practices would be more meaningful. Outsourcing the work of racial justice isn’t sufficient when a broken system of capitalism has produced indefensible levels of wealth for owners and daily insecurity for workers. The corporate sector has the responsibility–and the ability–to act now.

Source: If Corporations Really Want to Address Racial Inequality, Here Are 9 Things That Actually Make a Difference

On the more abstract and process side, two examples starting with the call by Mireille Apollon, Sébastien Goupil and David Schimpky of the Canadian Commission for UNESCO:

Earlier this year, the UN High Commissioner on Human Rights, Michelle Bachelet, put out a call for feedback on efforts underway to achieve the objectives of the International Decade for People of African Descent (2015-2024).

Given the dramatic events and protests that have marked the year so far, one could say that little has been done to advance the spirit of this important Decade. Unfortunately, it remains too-little known among nation states and institutions.

United Nations international years and decades are not celebratory; they are calls to concerted action on issues that need attention over a long period. The International Decade for People of African Descent expresses an urgent need for states to eradicate systemic racism and ensure recognition, justice, and development for Black people and communities.

For some time now, the UN has done its part to sound the alarm and remind us that our world faces a crisis of racism and racial injustice. In 2001, it convened the Durban Conference, which was intended to unite the world around fighting racism, but was overshadowed by strife among the participants and the 9/11 attacks. The conference nonetheless ended with the adoption of a vigorous program of action to be implemented by member states to fight racism and discrimination.

This conference was also the origin of flagship initiatives, such as the creation by UNESCO of the International Coalition of Sustainable and Inclusive Cities, which are across the world. This network includes our own Coalition of Inclusive Municipalities, whose principal objective is expressly to fight racism and discrimination.

The conference also led to the creation of a Working Group of Experts on People of African Descent, which looked at the situation in Canada in 2016. Their well-researched and thoughtful report should be mandatory reading for every Canadian. It concludes:

“Despite the reputation for promoting multiculturalism and diversity and the positive measures taken by the national and provincial governments …, the Working Group is deeply concerned by the structural racism that lies at the core of many Canadian institutions and the systemic anti-Black racism that continues to have a negative impact on the human rights situation of African Canadians.”

An important step was taken in 2018, when Canada recognized the International Decade for People of African Descent, and announced significant funding programs and the creation of an Anti-Racism Secretariat. But let’s return again to the question from the high commissioner: how much progress have we seen over the past five years?

The Decade has been embraced by many Black organizations and activists, and there have been remarkable strides in Nova Scotia, which last year launched a historic action plan related to the International Decade. The Michaëlle Jean Foundation and the Federation of Black Canadians convened historic summits to mobilize Black communities and propose concrete actions.

Our Commission has undertaken new partnerships, including working with the Canadian Institute for Identities and Migrations on two special editions of Canadian Diversity dedicated to the voices of African descent leaders, thinkers, and activists. In addition, we are working with the UNESCO Chair on the Prevention of Radicalization leading to Violence and Project SOMEONE on a recently launched toolkit to tackle racial and social profiling.

That said, the International Decade remains largely overlooked. The past few weeks have demonstrated that anti-Black racism is alive and well, and not just south of the border. Black Canadians are right to demand real action, and governments and intuitions everywhere need to respond. We need to implement policies and significant measures that promote diversity and inclusion, and address racism and discrimination in all their forms.

Let’s have the courage in 2020 to go beyond grand words and promises. This is the time for action. The way forward is clear, we just need to take it.

Source: A roadmap already exists to advance the rights of Black communities

Lastly, similarly efforts by DND and the CAF to address anti-Black racism are heavy on process:

Addressing anti-Black racism in the ranks of the Canadian military is a matter of national security, with recent bad press likely to dampen recruitment, says the head of the Federal Black Employee Caucus.

“For a long time this work has been piecemeal and people kind of do it at the corner of their desk, but now there is such a higher level of importance that [is] being put on it and getting it right,” said Richard Sharpe, founder of the Federal Black Employee Caucus (FBEC).

The Department of National Defence convened a meeting on July 27 to have its management “listen and learn directly from visible minority defence team members about the lived experience and systematic barriers that they and other colleagues face on a daily basis,” according to a July 28 statementfrom outgoing chief of the defence staff Jonathan Vance and national defence deputy minister Jody Thomas.

The meeting came after a June 19 letter that Gen. Vance and Ms. Thomas sent to DND members apologizing for the delay in addressing the outpouring of response to the police killing of George Floyd and reports of systematic racism within DND and the Canadian Armed Forces.

Those members of DND who presented gave three recommendations for the Canadian military to implement: establish a secretariat for members of DND to report on racial discrimination, make clear who is responsible for implementing policies and processes to tackle racism, and align DND with the rest of the public service to collect disaggregated data and renew the Employment Equity Act.

“I don’t want to fawn all over them, but I think they’ve been doing a very good job of addressing some of these issues—at least at the senior levels of the organization—head on,” said Mr. Sharpe, who took part in the July 27 meeting. “I appreciate the fact that we had a very frank and open discussion about race and anti-Black racism.”

He said changes to the Employment Equity Act are “long overdue.” The act, which was passed in the 1980s, outlines four classes of people that receive special protections: persons with disabilities, women, Indigenous people, and visible minorities.

“It refers to Black and racialized people as visible minorities and our experiences are masked within that visible minority term,” Mr. Sharpe said.

During the meeting, Gen. Vance and Ms. Thomas wrote, the leadership of the Canadian military heard about the need to “re-imagine and re-design,” so the new policies work for those without power within the structure of DND.

“The experiences they shared exposed persistent and deeply painful occurrences of aggressively racist behaviours, micro-aggressions, and failures of leadership to address both,” Gen. Vance and Ms. Thomas’ statement read.

The statement also referred to the creation of a DND Black Employee Network, something Mr. Sharpe called “really important.”

He noted that FBEC has been pushing for the establishment of Black employee networks—which create a safe place to gather to establish recommendations and have their own voice within institutions to push for change as a distinct group—across the public service.

“So with DND committing to do this, I think it gives great space for this to happen and a focus that we’ve never had. There’s never been a focus on Black employees in the public service,” Mr. Sharpe said.

The DND Black Employee Network is made up of both military and civilian members, who can “come together to share their experiences and discuss ways to respond to anti-Black racism within the Defence Team,” according to a DND spokesperson, who added that the group’s mandate is provide space for Black members of DND and the Canadian Forces to “explore, discuss, and create ways to tackle anti-Black racism.”

It will be made up of departmental volunteers who will act as a consultative body for senior DND and military leaders.

“It really does continue to feel like historic times here, with all that’s been happening, and there’s been movement on this work [that the FBEC] has been pushing for two years,” said Mr. Sharpe.

Given the new territory of DND’s initiative, Mr. Sharpe said it’s difficult to establish concrete timelines, but added he’s heard from DND leadership that they want to enact changes “very quickly.”

“This is a national security threat for DND. …The bad press, the reputational damage impacts on the ability on the organization to recruit people,” he said. “So I think they’re trying to get this stuff in place as soon as possible, addressing any kind of reputational damage that they may be experiencing due to the ongoing incidents of racism within the ranks and intolerance in the various defence [branches].”

Canadian Forces College professor Alan Okros, an expert on diversity in the military, said the networks provide a way for individuals to have a voice and have their concerns illuminated.

“In the current context, there is more of an interest at the senior leadership level in listening to [advisory groups] and hearing what’s going on,” he said.

Gen. Vance and Ms. Thomas said in their statement that National Defence Minister Harjit Sajjan (Vancouver South, B.C.) is “fully seized with addressing racial discrimination” within DND, adding that he “expects bold, decisive action” from both DND and the Canadian Armed Forces.

Mr. Sajjan told CTV last month that during his early days in the Armed Forces he realized “how intense racism can be.”

“I remember one person … saying to me, ‘I let you join my military.’ Just that position of power and privilege that he was throwing in my face, it just upset me so much,” he said.

Prof. Okros said the Black Lives Matter protests in the United States and Canada have given an increased impetus to diversity and inclusion work that started with Marie Deschamps’ 2015 report on sexual assault in the Canadian military, which led the Canadian government to launch Operation Honour to tackle sexual assault and misconduct.

“It’s moved it up a notch in terms of the level of attention and focus on it,” he said, adding that Gen. Vance and Ms. Thomas have made it clear this is how they want to lead.

Prof. Okros said now that the senior leaders have held a meeting to listen, the big question is: what have they heard and what is going to be done?

A DND spokesperson said implementation timelines and funding have not yet been determined.

“As we work towards establishing the appropriate framework and resources for this critical initiative, we are continuing to be open and transparent with the entire Defence Team,” the spokesperson said.

The recommendations being put forward are “good first steps,” Prof. Okros said, adding that there will be individuals who will be expecting more to be done to fully achieve what’s required.

“I think they’re definitely going to be interested in moving as quickly as they can,” he said. “It likely is going to result in some staged or staggered implementation, recognizing that in some of these cases there are legal issues involved and it takes time, and there’s a requirement to be prudent if you are going to make changes that have legal consequences.”

“Creating the secretariat, clarifying roles and responsibilities are things that can be moved forward fairly quickly,” said Prof. Okros. “I think part of what the next steps are is going to depend on having some legal review and some policy review to make sure they get it right.”

Gen. Vance and Ms. Thomas called the July 27 meeting “just a start.”

“We will be meeting with the other defence advisory groups to hear their stories on discrimination and systematic barriers. We know there is so much more to do, and that we will be judged based on our actions and results, not our sentiments and promises.”

Source: ‘It’s a national security threat’: DND launches anti-Black racism initiative

How do we fill the pipeline with board-ready women?

While the issues facing women are different, there may be some parallels with respect to increasing visible minority and indigenous representation:

On Tuesday, countries around the globe join in celebrating International Women’s Day, honouring the achievements of women and mobilizing with programs to close the gender gap. This year’s theme, Pledge for Parity, is a call to accelerate equality, with a special emphasis on shrinking the gender gap in leadership positions.

It’s time to consider what this means for Canada’s leadership landscape. We need to take a close examination of who our CEOs are and who is seated in our boardrooms.

It has been just over a year since new regulations required companies listed on the Toronto Stock Exchange to annually disclose the percentage of women on their boards of directors and in executive officer positions. Now companies must report their goals and the actions being taken to increase their figures, or provide reasons when no such targets exist.

Proponents of the legislation hope that the guidelines will raise the percentage of board seats held by women to 30 per cent – but even they acknowledge that progress beyond that level will require a more robust pipeline of female executive candidates. To truly achieve gender-balanced boards, we need to examine some of the root causes of the imbalance. While tremendous energy is being exerted on quick fixes, how do we take a long-term approach?

As someone who works closely with boards and CEOs to identify and develop the next generation of business leaders, I believe that we need to closely examine women in mid- to senior-leadership positions today to build a more robust executive pipeline – particularly since many companies are inadvertently hampering their own progress.

Consider what happens when a high-potential female executive returns from family leave, seeking a position that allows her to ease back into the workforce. Often, companies respond supportively by transitioning her from an operational role into a functional support role, allowing for career development that builds functional expertise and deepens her contribution and seniority without the time and travel demands of operational leadership.

At face value, this seems to be a win for all parties. But there’s a catch. These women with exceptional potential wind up in positions where they get overlooked for future growth or profit-and-loss leadership opportunities. Their steady success in transitional and functional roles limits their potential for future CEO or board roles.

As board positions become available and nominating committees seek new director candidates, they invariably prefer those who have been CEOs or heads of business units, bringing effective P&L management.

Our research shows that 21 per cent of the direct reports to the CEO of TSX 250 companies are women, while two-thirds of those women are leading support functions. Of the direct reports who have operating leadership roles, just 7 per cent are women. The pipeline of board-ready women doesn’t flow.

While we work to make the number of women in the boardroom rise above 30 per cent, both corporate Canada and female executives need to focus on building operational excellence. We must have more female contenders for CEO succession, and in order for this to happen, must collectively consider and thoughtfully engage in career-path decision-making.

Only by addressing these root issues can we hope to move toward full gender equality at the top of the corporate pyramid.

Source: How do we fill the pipeline with board-ready women? – The Globe and Mail

Enough inertia. It’s time for gender quotas in the boardroom: Wells

Jennifer Wells on the need to legislate diversity in the boardroom (because it’s 2016?):

German Justice Minister Heiko Maas offered a more vibrant take, declaring the legislation “the greatest contribution to gender equality since women got the vote.” In other words, the greatest contribution in 100 years.

Here’s the message: when companies won’t budge, legislate.

Here’s the underlying message: left to their own devices, companies won’t budge.

Germany’s experience is not unique. Of course it isn’t. Watch as jurisdictions introduce voluntary quotas. Observe the snail’s pace of change across a decade or two.

Observe Ontario. Nine months after securities regulators, including the Ontario Securities Commission, adopted their so-called “comply or explain” policy, a toothless bit of silliness if ever there was one, fully 65 per cent of TSX issuers sampled reported that they had not adopted a policy aimed at identifying and nominating women directors.

Let me amend that: it’s not that those issuers had yet to adopt the recommended policy, but that they had made the decision not to adopt.

We are in the dark ages.

In 2002, women in Norway comprised six per cent of the country’s board members. The government of the day initially took the voluntary approach, appealing to publicly listed companies to up their game. That didn’t happen. The solution: amendments to company law. New rules, introduced in 2006, demanded that boards of publicly listed companies be comprised of at least 40 per cent women. That did happen.

France took a two-stage approach, giving publicly listed companies until 2014 to reach 20 per cent representation. As of next year, the requirement jumps to 40 per cent.

Iceland (40 per cent). Spain (40 per cent). Finland (40 per cent). There are too many examples to be documented here.

Some quota skeptics have been brought on board, including an initially resistant Christine Lagarde, managing director of the International Monetary Fund.

One of the arguments against quotas is that board parity, or a move toward parity, hasn’t thus far equated in the research to a significantly higher number of women in top management. Women CEOs remain as scarce as hen’s teeth.

Yet it has been demonstrated, most recently in a report this week by the Washington-based Petersen Institute for International Economics, that the representation of women in the C-suite correlates to improved corporate profitability. “For profitable firms, a move from no female leaders to 30 per cent representation is associated with a 15 per cent increase in net revenue margin,” the authors found. (The report was based on a survey of 22,000 firms across 91 countries, albeit it was a single-year snapshot.)

The researchers qualified their analysis as possibly too crude — their words — to discern the significant positive effects of board quotas. But they did cite a correlation between the presence of women on boards and the presence of women in executive ranks. “If increased gender diversity in corporate leadership contributes to firm performance, if quotas have negligible costs, and if the presence of women in the C-suite enhances the pipeline effect by encouraging more women to pursue these positions, as is often claimed, then some kind of quota system may warrant consideration.”

What we do know is that any expectations that boards will organically reshape themselves into balanced assemblies of men and women have not, and will not, be met.

In June 2014, Kellie Leitch, then Canada’s minister for the status of women, announced that a reasonable national goal was to “aspire” to 30 per cent representation on boards by 2019. The result: inertia.

I find “aspire” to be a very genderized word. Like “upset.”

Let’s choose instead “anger” and a need to “force” a dynamic outcome.

Quotas are the way forward. We can discuss a range of sanctions for failure to conform, from empty board seats (I agree) to, as in Norway, threatened dissolution for non-compliant companies (a step too far).

A chorus of voices will no doubt rise in opposition here, citing the argument that directors should be chosen on merit. Excellent idea. Move to parity and you just might find that future members are indeed chosen on merit and merit alone.

Source: Enough inertia. It’s time for gender quotas in the boardroom: Wells | Toronto Star