In Australia, we have just elected an historic gender and ethnically diverse Federal parliament with women’s representation in the lower house at 38% and over 50% in the Senate. Meanwhile, Sam Mostyn, of Chief Executive Women (CEW), laments “progress towards balanced leadership in decision making roles has stalled at unacceptably low levels (over the last five years)”. Overseas, last year the French parliament legislated a 40% gender quota for corporate leadership having dealt with political quotas in 2000.

Focusing on the issues targets or quotas are meant to address including the failings of merit, unconscious bias, and slow cultural change, we look at global research and back to our 2019 paper – The Long Game – Building a diverse talent pipeline.

Global data supports legislated quotas in bringing more qualified women into politics and corporate boards without the much-opined disasters. However, we see little gender trickle down into executive ranks. Unsurprisingly, quotas are only part of a comprehensive plan to drive culture change towards a pipeline of diverse and inclusive future leaders. Whilst quotas maybe a blunt tool often tainted by negative sentiment, to ignore them leaves us open to criticism that we aren’t doing enough, fast enough.  The choice is ours.

Before we go to quotas, let’s look at the usual objection.  Why do we need quotas when we have perfectly good merit system? 

Meritocracy – it’s a myth!

Despite talent driven organisations aspiring for meritocracy this doesn’t mean equality exists. A meritocracy ‘discriminates’ based on how much ‘merit’ i.e. skills, experience, ongoing development, that a person is perceived to have accumulated.  Then add in the subjectivity of assessing how these past merits will apply to future performance.

Two problems arise with the merit argument. Firstly, it assumes everyone has equal access to acquire perceived qualities we loosely label as merit. The playing field isn’t level as equally or better qualified women are entering careers but not arriving in numbers at the senior ranks.  They are being denied the managerial opportunities of their male counterparts to build their merit.

Secondly, executives must be assessed only on criteria relevant to the role that predicts future performance; however, these criteria are difficult to quantify and assess.  We can end up with inaccurate perceptions of merit and often include unconscious gender bias perceptions that aren’t performance predictive.

Bias – it’s lurking in plain sight

To understand better how unconscious bias works against merit, let’s consider some research where only merit selection was possible – blind auditions for the New York Philharmonic Orchestra.  Cecelia Rouse and Claudia Goldin (2000)  found that women’s new hires increased from 10% to 45% due to blind auditions. The selectors had insisted that the lack of women was due to the preferred playing style coinciding with a male style.

Blind auditions found that playing style was a gender stereotype – an unconscious bias on selection.  Research tells us gender is not a differentiator on the vast majority of personality and behavioural dimensions, why then should we differ in leadership characteristics? Next step – leadership blind selection?

While blind selections appeal on pure merit, the ‘NY Philly’ still has only one black musician as per the 1970s. In July 2020, Anthony Tommasini, the NY Times classical music critic, wrote that “the audition process should take into account race, gender and more, to reflect the communities they serve”. Tommasini argued blind auditions aren’t enough rather opting for more intervention for orchestras to reflect their communities.  As is often said, “you can’t be what you can’t see”!

Working on our hidden bias

Our 2019 paper, found that talent driven companies aim to drive out unconscious biases by ongoing training, strong policies and inclusive leadership. These include: avoiding ‘mini me’ hires via real choice of differentiated candidates; visibility – all promotions/new hires are contested where leaders actively encourage diverse candidates to move sideways to build their ‘merit’; and, equal gender interim lists and blind resumes which can improve selection inequities.

Quotas – a blunt tool, no trickle down

  • OK for Directors. The Economist in 2018 highlighted that despite EU quotas of 40% female directors for over a decade, little has changed for CEOs. In Norway, just 7% of major firms had female CEOs; in France, only 2%; and, the USA, 5% without quotas. Overall, women C level executives remained unchanged at 20%. Hence, the UK’s 30% Club and our CEW have set executive gender targets and, in May 2021, France has legislated a 40% executive quota by 2027.  While no trickle down to C level, quotas have not been the disaster that some predicted. Hard targets and time frames have focused minds on improved processes to find undiscovered quality candidates.
  • OK for Politicians. Gender targets exist in over 100 countries around the world in politics. Some are voluntary and some legislated. In Ireland, women must make up 30% of a party’s candidates or public funding can be withdrawn. France has had a parity law since 2000 and a 2010 study found the number of female politicians had almost doubled. In Australia, progress across all parliaments is one sided. Prior to the May 2022 Federal election the two left parties, Labor and Greens, had 45% and 53% respectively.  Labor set quotas in 1994 then at 14% women representation. The combined conservative parties averaged 24% with an aspirational target of 50%.  In politics “merit is simply who has the numbers” says Margaret Fitzherbert, a former conservative MP and author.

Quotas alone have not changed poor cultures

While many organisations have voluntary gender diversity targets, these alone will not improve gender diversity and broader inclusion without strong change programs. Our 2019 paper reviewed global research finding successful programs require: small, self-managed teams driving change; detailed, regular progress reporting; C level advocacy; sponsorship programs; and, targets linked to KPIs and rewards.  BHP reports and links rewards to their diversity leadership targets. Money talks!

Cultural change is a long game and much more work needs to be done on building diverse talent pipelines, to nurture future inclusive leaders that reflect our society, otherwise calls for quotas will increase, as slow progress will not be tolerated. The call has been answered, this time at least, by a progressive electorate choosing diverse candidates for Australia’s 47th Federal parliament. Could this be just the start?

Michael Swinsburg is managing partner at Alexander Hughes Executive Search.

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