Yesterday, Switzerland’s National Council, or parliament, voted 95 to 94, with 3 abstentions, to introduce quotas for the management and boards of quoted companies.
Boards will be required to have 30% women and management teams 20%. The rules could affect 250 companies.
At the same time the quotas will not come with sanctions. Companies would have to explain why the quotas had not been met and set out plans to meet them in the future.
Speaking to RTS, Simonetta Sommaruga, Switzerland’s minister of justice, said that while there are no sanctions, the move would force companies to explain themselves and bring much needed transparency.
As shown by the close parliamentary vote, quotas are controversial, partly because they don’t address the causes of inequality. In addition, some argue that imposing a particular outcome ignores potentially acceptable reasons for differences.
A US study, which looked at MBA graduates from the University of Chicago Booth School of Business between 1990 and 2006, found that women with MBAs who did not have children followed career paths similar to those of their male peers.
Research by Claudia Goldin, at Harvard, looks at gender pay gaps across three industries. Her study shows a large gender pay gap in business but low ones in science and tech. One reason for the difference is work flexibility. Job performance in science and tech is based more on results than face time. Business1 however, is more concerned with face time and long hours. If someone isn’t always there, their job performance is deemed poor, something that disproportionately affects women with families.
Goldin recommends more temporal flexibility – this doesn’t mean shorter works hours. But, crucially, companies must find low cost ways of doing this. If they don’t then economics will continue to drive gender bias. In addition, Goldin says there will always be some jobs, like president of the United States, where temporal flexibility is undesirable and impractical.
Another driver of workplace gender inequality is maternity pay. Imagine a couple, both with MBAs, planning a family. If paid leave is higher for her than for him, it is more likely she’ll step out of the workforce. A pool of paid parental leave that could be shared between mother and father would help to reduce this inequality.
1Goldin includes business, finance and law together.