Corporate board diversity quotas improve gender equity for lower-ranking women in the workforce too, according to new research
Good morning, Broadsheet readers! More U.S. lawmakers visit Taiwan, the Army is set to introduce its first uniform bra, and corporate board diversity quotas have an impact beyond the board. Have a productive Monday.
– Beyond the board. Advocates of quotas for gender and racial diversity on corporate boards of directors cite several justifications for their implementation, including improved shareholder returns and more responsible corporate governance.
But what about reforms that benefit workers whose daily roles are far removed from boardroom decision-making? A new paper by academics Ana Catalano Weeks of the University of Bath and Audrey Latura of Harvard finds that requirements to increase women’s representation at the top of the corporate hierarchy can have “downstream effects,” improving outcomes for women at all levels of the workforce.
The researchers studied more than 900 annual reports and sustainability reports from almost 100 companies in Italy and Greece; while the two countries have similar economies, Italy adopted a quota for public company boards in 2011 and Greece had no such law at the time. Their study found a 50% increase in overall attention to issues related to gender equality in Italian companies’ annual reports after the quota law, and no change in the same time frame for Greek businesses. Italian companies, required to represent women at their highest levels, began discussing issues like paid leave, childcare, and the gender pay gap more frequently.
“This research suggests that quota laws can have positive effects beyond the numbers of women added to top leadership roles,” says Weeks, who studies gender and politics.
Some of the impact on lower-level workers can be credited to high-ranking women who join an organization and make gender equality a priority. But that’s not the only reason businesses see change. “We posit that the quota law raises awareness of gender inequality among men and women in company leadership, changes existing perceptions about these issues, or creates fears of negative backlash or being left behind if firms do not address it,” the researchers write in their paper.
Corporate board rules still aren’t a quick fix to create gender-equitable workplaces. Some issues—like sexual harassment and assault—remain unaffected by greater representation of women at the highest levels. “These quotas aren’t a panacea for every issue,” says Latura, whose work focuses on employer benefits and women’s professional outcomes.
Still, as quotas face hurdles in the U.S.—with California’s racial and gender board diversity laws struck down—this new research shows the consequences of losing such laws extend far beyond boards themselves.
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ALSO IN THE HEADLINES
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ON MY RADAR
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