Targeting diversity: Why female leadership quotas consistently fail

Although 31 per cent of all lawyers in the US are women only 15 per cent are equity partners, in the UK’s top-100 firms only 9.4 per cent of equity partners are women. Across the business world, headlines about female representation at board level are mixed, further clouded by recent reports from the US that droves of senior women are opting out of the workplace altogether.

Meanwhile, mounting evidence that board diversity is a source of competitive advantage, along with awareness of the economic costs implied in the underuse of female talent, have caught the attention of the many organisations. Initiatives like the 30% Club have spurred chairs into action, but moves around the world to correct the balance have been slow to take effect.

Despite unprecedented focus, an understanding of how to establish gender balance in the ‘C-suite’ or at partner level remains elusive. There is a lot of work still to be done to shift the balance in global law firms, where stakeholder pressure may not be as strong as say on the Australian Securities Exchange (which demands that all listed companies detail their progress against gender diversity targets).

The percentage of female board directors still remains at around nine to ten per cent in most countries. Moreover, this figure seems to have peaked, with stagnant or no increases in many developed nations. This has prompted researchers to examine existing efforts to increase diversity in organisations and to consider whether strategies need to be revised.

Targets and quotas are the strategies commonly applied in bids to boost gender diversity. For example, Norway introduced the 40:40:20 rule for corporate boards in 2003 (i.e. at least 40 per cent of each gender and the remaining 20 per cent of either gender). Similarly, a 2011 resolution passed by the European Parliament requires quotas to apply in all EU nations, with female board representation to be at 30 per cent by 2015, and at 40 per cent by 2020.

This article looks at the standard solutions proposed, either ‘targets’ or ‘quotas’, and goes on to consider some profound psychological causes for gender imbalance and ways to counter these. It shows why quotas may not work as intended, how targets (if well designed) can help to achieve the desired benefits, and considers how identity conflicts can
be barriers to female advancement.

Affirmative action

Affirmative action programmes can vary from quota systems to something more informal, such as preferences during selection processes. Put in place to avoid discrimination, they can lead to resentment, distrust and the stigma of not being viewed as merit based. Affirmative action programmes can also have a negative effect on women’s attitudes to leadership.

Research carried out in Brazil by Insper Business School found that when female employees perceive that their organisation practices gender-based affirmative action, they are less likely to seek leadership positions, even though these actions are designed to increase their access to such positions.¹ Brazil is a useful benchmark compared with the UK and US, as female board-level participation is relatively high
at 14 per cent.

Brazil has experienced a surge in the adoption of affirmative action programmes over the past decade. In their research, Insper’s Gazi Islam and Sarah Zilenovsky measured three things: the participating executives’ perception of the justice of affirmative action; their belief in the existence of an affirmative action programme; and their leadership attitudes.

They found that the mere belief in the existence of affirmative action programmes can have a negative effect. They found that, in general, women tend to judge themselves as having less leadership capacity than men. In addition, women
who believe their organisation practices gender-based affirmative action feel less desire to attain leadership positions. However, they also found that women who perceive affirmative action ‘justly’ assess their leadership capacity more positively and will desire a leadership position more than those who do not.

So what can be done to improve gender diversity? One suggestion is that organisations should focus on changing their culture to make employees more receptive to differences, instead of through affirmative action alone. Asian companies, for example, were cited in a 2009 Economist Intelligence Unit report as
using the heterogeneity of the larger population to allow diversity to grow
within the organisation organically, rather than forcing it through programmes.²

As far as quotas go, the Insper researchers’ question about the ‘justice of affirmative action’ drew strong criticism from those who believe they undermine
the principle of merit; a less competent woman may be chosen over a more competent man, simply because a
quota needs to be met. Targets, on the other hand, are more of a voluntary, aspirational goal for levels of gender representation in an organisation.

According to Jennifer Whelan and Professor Robert Wood at Melbourne Business School’s Asia Pacific Social Impact Leadership Centre, the use of both targets and quotas evoke negative reactions.³ They note that women hired under affirmative action practices are in general seen to be less competent and less deserving of their position, even by the women themselves. This may be a key reason why, despite the existence of targets in many organisations, they have failed to produce a significant increase in gender diversity, as managers do not inherently accept them and are not committed to their implementation.

The case for mandatory quotas is a weak one, given their cost, the negative cultural and psychological implications, and the ambiguous evidence of their benefits. Voluntary targets, on the other hand, could be better designed and implemented to greatly improve their potential effectiveness. Targets are already heavily utilised and highly effective in other areas of managerial work. Assigned gender targets for which managers are held accountable and,
where appropriate, rewarded for achievement, could be similarly effective
if used sensitively around issues of diversity.

Whelan and Wood also recommend making clear feedback on any progress on diversity that an organisation makes; for example, publishing data on the firm’s website on the proportions of women
in leadership roles and annual changes
in proportions.

In a later article, Whelan makes the point that the benefit of boardroom diversity lies not in the ‘feminisation’ of board functioning, but rather the fuller utilisation of human talent and the return on the social investment of educating and developing women in the first place.⁴ This, she says, is the message researchers and proponents of gender diversity should be promoting.

This brings us to a broader and more profound reason for the slow progress towards gender diversity: the difficulty many women face in reconciling their professional roles with their identities as women. These difficulties are not confined to balancing the commitments of home and working life, but also relate to the psychological barriers confronting women moving into leadership roles.

Reconciling identities

Traditional notions of ambition, power and leadership appear to be at odds with traditional notions of femininity. Consequently, many women feel
prevented from being their ‘authentic selves’ at work and so decide to ‘opt out’ of seeking power – in some cases leaving the workforce entirely.

Solving the problem may depend on a fundamental shift in organisational values and reversing ‘gendered definitions’ of leadership, rather than just considering formal strategies like targets or quotas. According to Justine Lutterodt,
director of the Centre for Synchronous Leadership, while formal tactics like affirmative action contribute to moving
the needle, they address the symptoms rather than the cause of why women
feel excluded.⁵

Her research found that the majority
of the career challenges that women grapple with can be attributed to three main sources of tension – all of which concern their relationship with power.

1. Desire for power – many women are conflicted about their ambitions and about expressing a desire for power. In a competitive environment, their passive posture makes them less likely than their male counterparts to receive support from their firms, or to take the necessary steps towards achieving their goals independently.

2. Play for power – while men largely expect to jockey for status, even women who are naturally competitive can struggle to blow their own trumpet, put themselves forward for positions, or call in favours from their network; they judge these behaviours to be awkward, pushy or even aggressive.

3. Use of power – many women have mixed feelings about driving change forward in a top-down fashion. The traditional model of authoritarian leadership can feel incompatible with the supportive traits that characterise femininity.

Research at INSEAD, based on an international sample of 638 women from a wide range of industries, found a link between identity conflict and higher stress levels, lower life satisfaction, and the motivation of female leaders to take on leadership roles.⁶ It found that:

• positive gender identity reduces the sense of conflict: the better women feel about their gender identity, the more easily they can integrate their new identity as leaders into their ‘sense of self’;

• identity conflict can diminish over time: women who rise to the very top of their organisation’s hierarchy have usually assimilated their ‘leader identities’; previous experience and successful attempts at leadership have helped them to identify ‘naturally’ with the social category of leader; and

• women find it easier to assume the identity of leader where the number of female employees is high across the organisation. It is more difficult for female leaders to maintain a positive gender identity and gain a ‘licence’ to lead in male-dominated organisations.

The INSEAD researchers also point to a number of practical steps that can be taken to reduce identity conflict and develop and retain high-potential female employees. These include:

• establishing mentoring programmes that not only provide psychological support to women with leadership potential but also convey the value the firm places on female leaders;

• making the leadership role ‘gender neutral’ by stressing the importance of leadership qualities such as collaboration, care, inspiration and interpersonal sensitivity;structuring departments and designing job descriptions so that women have more direct contact with other women;

• choosing executive education programmes that include both women-only and co-educational sessions; and

• coaching and counselling sessions that not only address specific leadership skills but also explore clients’ perceptions of the ‘fit’ of their
  gender at work.

Striking a balance

Findings from these research initiatives have important implications for law firms. It is clearly important to not attempt to set formal quotas for gender diversity, but rather to design well-considered voluntary targets for which partners or senior managers are held accountable.

Action should then be taken to ensure the firm’s values are consistently aligned with and sensitive to the psychological barriers female leaders face. Finally, management should ensure that progress the firm makes on gender diversity is widely communicated – both internally
and externally.

Peter Chadwick is CEO at Ideas for Leaders (www.ideasforleaders.com)

Endnotes

1. See ‘Affirmative action and leadership attitudes in Brazilian women managers: The moderating influence of justice perceptions’, Gazi Islam and Sarah ES Zilenovsky, Journal of Personnel Psychology, Vol. 10 Issue 3, 2011. See also Idea #302, Ideas for Leaders.

2. See Global Diversity and Inclusion: Perceptions, Practices and Attitudes, Society for Human Resource Management and Economist Intelligence Unit, 2009

3. See Targets and Quotas for Women in Leadership: A Global Review of Policy, Practice, and Psychological Research, Dr Jennifer Whelan and Professor Robert Wood, Centre for Ethical Leadership, May 2012. See also Idea #162, Ideas for Leaders.

4. See ‘The myth of merit and unconscious bias’, Jennifer Whelan, The Conversation, October 2013

5. See ‘Lead Like a Woman: Rewriting the Rules of Corporate Success’, Justine Lutterodt, Developing Leaders, Issue 14, January 2014

6. See Me, a Woman and a Leader: Antecedents and Consequences of the Identity Conflict of Women Leaders, Natalia Karelaia and Laura Guillen, INSEAD Working Paper 2012/117/DS, 2012