Is it time to stop arguing against gender quotas?

Quotas can be a demonstrably effective way to reach its diversity and equality goals, but not everybody believes quotas are the answer. We take a look at arguments for and against quotas.

Gender diversity in Australian businesses isn't just a matter of fairness and social justice; it's a critical economic issue. A recent McKinsey report highlights that improving gender equality in the workforce could boost Australia’s GDP by as much as $60 billion by 2030. Despite these potential gains, Australia currently has no mandatory corporate quotas. However, a growing number of influential voices, including top female executives, are advocating for quotas if voluntary targets fail to deliver results. These calls face resistance from opponents who argue that quotas are unfair and unnecessary.

Arguments for gender quotas

Quotas work

Norway’s Conservative Party introduced a mandatory 40% gender quota for public company boards over a decade ago. Since then, other countries like Iceland, France, and Spain have followed suit, and their boardrooms now boast a significantly higher representation of women. In contrast, Australia’s progress has been slower.

As of mid-2024, women held just over 35% of ASX200 board seats, up from 29.7% in 2018, according to the Australian Institute of Company Directors (AICD). While this represents progress, smaller Australian companies have a much lower representation, with women holding only 18% of board seats in the broader business landscape.

Quotas speed up social change

The current rate of change is too slow. AICD’s target of 40% female representation on ASX200 boards by 2025 is ambitious but highlights how far there is to go. Data shows that only 15 companies in the ASX200 have 50% or more female directors, while more than 40 still have only one woman on their boards. This reflects a systemic issue that quotas can help address. Quotas may not provide a long-term solution but can act as a short-term catalyst for change, ensuring that women are given a fair chance in leadership roles.

Gender biases exist

Biases still plague the hiring process. A study by the Australian Human Rights Commission found that almost one-third of employees believe gender stereotypes impact career progression. Meanwhile, blind recruitment practices, in which personal details like gender are concealed, have demonstrated that women are often hired at higher rates when their gender is unknown.

Quotas force companies to confront their biases by mandating equal opportunities for development and promotion. As Culture Plus Consulting notes, "Mandated targets help dismantle entrenched stereotypes and establish female role models for aspiring leaders."

While it won’t address the root causes of the gender bias, a quota will effectively bypass the effect of this bias when hiring.

Taking action

Male speakers at corporate events are increasingly boycotting all-male panels to protest a lack of female representation. Until recently it was common to see all-male panels discussing gender issues, or (embarrassingly) all-white panels debating diversity in the workplace. The boycott has even gained a Twitter hashtag, known as #panelpledge.

On a corporate level, Norway’s largest bank, DNB, has made it clear that it prefers to do business with law firms that have gender balance among partners. Organisations can expect to see more of this sort of expectation between organisations as the movement gathers pace.

Arguments against gender quotas

Merit should be the only factor

This argument against gender quotas is only applicable to professions where women make up a small percentage of the talent pool. Even then, a quota system will have the effect of building visibility for women and subsequently attract more talented female candidates.

There is a valid argument that if few women are present in a certain profession, they simply may not want to work in that field.

Opponents to quotas are concerned that perceptions of unfairness will lead to resentment. Advertising executive Robert Strohfeldt wrote: "Quotas result in tokenism and eventually, resentment as people who are less talented, qualified or both are appointed to positions, simply to ensure diversity”.

Even a meritocracy is subject to gender bias and a lack of opportunities for women to prove their merit. In an opinion piece for Medium.com, Ariel Pontes commented: “The day there is equality of opportunity, meritocracy will be perfectly justified. But until then, it only contributes to the maintenance of the status quo.”

Quotas fail to address underlying discrimination

Societal change on the issue of gender inequality should come from the bottom up; from parents and teachers rather than from politicians and HR functions. Quotas artificially imposed from above can breed resentment among those who disagree with the premise. Arguably, they do little to change the biases and attitudes that led to gender inequality in the first place. But as pointed out above, businesses cannot afford to wait until society catches up.

RELATED: Actions for individuals and organisations to close the gender gap

Interested in discussing the effectiveness of quotas for your organisation? Contact one of our team members whose most relevant to your location, function/industry.