Gender quotas can encourage corporate leadership to assign more importance to equality issues.
The European Union recently signed off on a new directive requiring large companies to include 40 per cent of the ‘underrepresented sex’ (typically women) on their boards. The directive, which comes into force in 2026, follows the lead of at least 13 countries which have adopted corporate-board-quota laws.
These laws have been successful in achieving their stated aim of increasing the share of women on boards—so we suspect the new directive will, similarly, increase significantly the number of women on boards across Europe. But can we expect the law to have broader impacts within companies, leading them to consider the underlying reasons why women are not often found in top corporate roles in the first place?
Cue broader changes
In a new study, we sought to answer this question. After a quota law, a ‘critical mass’ of women in the boardroom might feel more comfortable bringing up issues related to gender equality, such as family leave and childcare support, flexible work schedules and leadership training and mentorship for women.
Additionally, the adoption of the quota law itself draws attention to the issue of gender equality in the workplace. This added salience might cue both men and women in senior leadership roles to change their views about how important it is to solve problems related to gender equality.
Become part of our Community of Thought Leaders
Get fresh perspectives delivered straight to your inbox. Sign up for our newsletter to receive thought-provoking opinion articles and expert analysis on the most pressing political, economic and social issues of our time. Join our community of engaged readers and be a part of the conversation.
To investigate whether corporate board quotas lead companies to increase their attention to gender-equality concerns, we compared two southern European countries, Italy and Greece. In 2011, Italy adopted a gender quota for corporate boards for companies listed on the Italian stock exchange. Greece did not.
The countries are similar in terms of the low number of women in private-sector leadership, as well as minimal government spending on work-family policies. If, after the quota, the Italian companies increased attention to programmes and policies directed at improving gender equality within the organisation, but over the same time period the Greek companies did not, we could be confident that this was due to the quota.
We constructed an original dataset of the text of corporate annual and sustainability reports for listed Italian and Greek companies for the years immediately before and after the Italian quota law was passed. Our findings show that, before the quota law, Italian and Greek companies were on a similar trend in terms of the attention they paid in these reports to gender equality.
Yet, after the quota, Italian companies significantly increased this, by 50 per cent, while Greek companies remained unchanged. After the quota law, Italian companies gave more consideration to the gender gap in leadership, the gender pay gap and especially issues related to work-family balance, to which companies increased attention most.
Italy’s board quota was adopted in 2011 but implemented in 2012. We observe more corporate attention towards gender-equality issues after 2012, suggesting the women who were brought in by the quota could be responsible for those changes. We also see increases however in 2011—before companies were required to comply with the law.
This suggests that quotas influence both women and men (who are most often in firm leadership roles) to enhance the attention they give to gender equality in the workplace. Quotas can have a ‘spillover’ effect influencing corporate leadership to assign more importance to equality issues, beyond numbers of women alone.
Importantly, these changes are not mere ‘window dressing’. A close reading of a selection of post-quota reports shows that companies made substantive changes to programmes addressing leadership and pay gaps, as well as childcare and workplace flexibility. In many companies, the quota triggered new policies and plans aimed at identifying women in the talent pipeline who were ‘ready for board’.
Examples include women’s leadership training, mentoring and role-modelling for women and programmes to track women’s inclusion at different levels of the company over time. Several companies pledged to adopt quotas in subsidiaries and abroad—although the law did not require it—or pledged to exceed the quota requirements. We also found new paternity leave, childcare subsidies and teleworking initiatives.
Support Progressive Ideas: Become a Social Europe Member!
Support independent publishing and progressive ideas by becoming a Social Europe member for less than 5 Euro per month. You can help us create more high-quality articles, podcasts and videos that challenge conventional thinking and foster a more informed and democratic society. Join us in our mission - your support makes all the difference!
Our results represent good news about the downstream effects quotas can have on removing barriers to gender equality in the workplace. With the EU directive set to affect many more companies, shall we see further transformation of corporate values and culture? Time will tell, but companies would do well to consider broader changes to workplace policies and culture that smooth the way for women to reach the very top.
This article first appeared on the EUROPP blog of the London School of Economics and Political Science