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The Dust Clears, Women Rise

At Recessionwire, we call it “She-orientation” — a powerful, society-wide shift in which women are coming to play an increasingly important role in determining our economic, cultural, and political path. The trend has become evident in recent discussions of how to get more women into corporate boardrooms.

It may be that more skirts on Wall Street would have prevented the financial crisis.  The dominance of adrenaline-fueled males on the Street, some argue, creates an atmosphere with less restraint and circumspection than an Animal House-style frat party.

What to do about it?

The Norwegians passed a law in 2003 requiring that 40% of all company board members be women. Whoa! Even Scandinavian sophisticates balked — one CEO scoffed that the country would have to hire escort girls because there weren’t enough qualified women to fill the slots.

Yet company boards went from just 7% female in 2003 to 40% in January 2008, and did not, after all, have to recruit hookers.

Since the Norwegians adopted their quota system, Spain and the Netherlands passed their own versions. France, Belgium, Britain, Sweden, and Germany are considering legislation. And some companies aren’t waiting for laws. Germany’s Deutsche Telekom vows that by 2015, 30% of its middle and upper management positions be filled by women — the first gender quota adopted at a top 30 DAX-listed company.

Crashing the glass ceiling is not all about fair play and social progress. Actually, it makes good business sense. McKinsey recently discovered that large European companies with three or more women board members performed better than more male-dominated companies in return on equity, operating results, and share price growth – findings echoed by a similar study by Catalyst.

The pro-quota camp argues that the pace of getting women into top level positions has been glacial, partly because boards are often beset with cronyism. Others see such policies as too restrictive and warn of stigmas for women who will be viewed as holding their positions simply because they are women. A recent article in The Economist warns, “If you are a youngish man who sits on a European corporate board, you should worry: the chances are that your chairman wants to give your seat to a woman.”

Scary!  However, The Economist concedes that having women board members can improve the chances of a company in dire straits. And that low female representation indicates a lack of meritocracy. But that old belief in self-regulating markets seems to hold sway. Everything will eventually sort itself out, the thinking goes.

Beth Brooke, named by Forbes as one of the World’s 100 Most Powerful Women, isn’t buying it. In fact, she sees the promotion of women in the corporate sector as a key factor in global economic recovery. ‘‘It is a smart thing to do, and frankly in these economic times around, it is an absolute imperative to appreciate the power of diversity from innovation perspectives and achieve better outcomes for society.’‘ It would be nice if companies would take the initiative themselves, but, she notes, quota systems like Norway’s can be ‘‘the last resort to force change’’ when voluntary efforts don’t cut it.

Was that the sound of glass breaking?