Maseko N Page 1 Women Quotas on the Board of Directors: Evidence from the world's major markets by Nelson Maseko – Technical Manager, ICSA in Zimbabwe; Doctorate of Business Administration, SMC University, Zurich, Switzerland e-mail: nelson.maseko@student.swissmc.ch Abstract Evidence from literature has shown that inadequacies with voluntary mechanisms to bring more women on boards led many nations to adopt quota legislation. This paper, however, argues that voluntary regimes, unlike quota systems, allow companies and their boards to set their own targets for gender diversity without many repercussions on firm performance and stock prices. Since most jurisdictions have codes of corporate governance that require companies to disclose reasons for non-compliance, this paper advocates for markets to be left to regulate corporate governance practices, including achieving “critical mass” for women on boards. Any quota legislation will dilute the effect of that prerogative. Market forces will force companies to achieve diversity thresholds in their own timeframes with minimal government interference. However, in the case that a jurisdiction intends to adopt a mandatory quota for women on boards, this paper recommends that a flexible timeframe for attainment of the quota by companies should be set and, the timeframe should be staggered so as to allow companies to recruit qualified and experienced women board members. Studies have shown that more time is needed to nurture previously excluded minorities to have the requisite skills and experience. Authorities should consider putting in place some incentives, like tax allowances, associated with attainment of certain levels of diversity during the adoption period. Companies should put in place comprehensive and flexible training programmes for straightforward integration of new women appointees into boards. Key words: women on boards, board diversity, women quotas, critical mass, mandatory quotas 1. Introduction Research on board gender diversity has been conducted as early as in the 1980s (Elgart, 1980), during which time the arguments sounded more feministic than governance. According to Kulik (2011), in recent years, the debate around board gender diversity has been rekindled following the aftermath of the global financial crisis of 2008-9. The greatest debate around gender diversity is whether to have ‘feminism of equity’ or ‘feminism of difference’, that is, whether women should be included on boards for mere gender representativeness or for the business benefits they will bring to the board (Gregory-Smith et al, 2014). Scholars are yet to show empirically whether gender quotas ‘shatter the glass ceiling’ or improve board decision-making or firm performance so as to plead the business case for board gender diversity. Corvet (2014) asserts that there are informal processes in play during the recruitment of board members which are biased towards a certain target population. Further, Covert argues that there is cognitive bias emanating from social science research suggesting a perception that men are better at business activities and thus better than women. Gregory-Smith et al (2014) found evidence of gender-bias in the appointment of women as non- executive directors and presented mixed evidence of discrimination in wages or fees paid. This is because there is a tendency for people to associate with those people who are socially similar to themselves. This tendency results in corporate boards and nominating committees recruiting members from their existing networks, and those networks tend to be socio-demographically homogeneous and closed to outside members, leading to an appointment process that is not inclusive. Lansing and Chandra (2012) posited that companies are harming themselves and their shareholders by only looking at half the available talent pool and thereby not utilising their maximum potential. Intra-firm initiatives, civil society activism like the 2020 Women on Board, the 30% Club and databases of board-ready women can help in addressing gender inequality on the board but legal intervention may be necessary, especially to curb implicit cognitive bias and closed social networks (Covert, 2014). Kulik (2011) explained dynamics in board