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Opinion

Uber Shows Why Gender Quotas Should Be Law for Company Boards

June 21, 2017

'It’s clear that all the hand-wringing and best intentions in the world have not moved the needle'

David Bonderman, former board member of Uber, got his hat handed to him last week when he suggested that adding more women to the company’s board would result in “more talking.” He resigned soon after. Earlier in the week, Uber confirmed that Wang Ling Martello had joined the board, bringing the grand total of women to two.

Bonderman made a horrendous gaffe. But the real story behind his comment reflects a widespread and enduring bias that has stymied progress toward stronger and more diverse boards in this country. Corporate boards are the collective keepers of Big Business’ fiscal and moral compass, and yet they do not reflect our country. Rather, they remain largely populated by older white men.

Progress to change the status quo remains glacial. Zeroing in on gender, only one aspect of diversity, just below 19% of Fortune 1000 company board members were women in 2016 — a percentage that only decreases in smaller and newer companies. At the current rate, it will take more than 40 years to achieve gender parity.

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Much lip service is paid to diversity on boards, but even well-intentioned nominating committees tend to search out more of their own kind, from their golf clubs or places of work. Other nominating committees are less cautious in their bias — I once heard a board member of a large public company say they would not “take a woman just to have a woman.” Telling anecdotes abound: A male board chair tells a woman board member that while she is strong, she is an exception to the general rule that there are “no good women.”

Compounding the challenge, many companies don’t have term limits that would allow for a healthy turnover of those board members who have outlasted their value to the company, which means the openings for new members are few and far between.

It’s clear that all the hand-wringing and best intentions in the world have not moved the needle in the U.S. Other countries, such as Norway and France, have put quotas in place, which have been effective to increase the number and percentage of women on boards today, as well as a pipeline of women who might someday serve. And global studies have borne out the fact that boards with three or more women perform better financially.

However, for some reason, the prevailing sentiment in the U.S. is “no quotas.” Some may fear government’s heavy hand, others may be concerned about maintaining quality and still others don’t want to risk an affirmative action-like stigma. And some sitting directors probably like things just the way they are.

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Some states have taken positive action. In 2013, both houses of the California State Legislature passed a resolution “urging” publicly held companies to add women to their boards. While it’s not a law, it demonstrates that women’s representation is a priority, and it was the first resolution of its kind in the nation. Massachusetts and Illinois quickly followed suit.

This progress is heartening, but far too slow. We need stronger, swifter moves to make real headway. Quotas should be instituted at the state level and at the federal level, by the Securities and Exchange Commission. And the quotas should not be limited to gender parity, but should also extend to underrepresented minorities, an important step beyond the quotas in European countries.

We have an opportunity that represents a triple win: Good for women and minorities; good for business and good for our country. Let’s stop dragging our feet and start leading the way.

Ann MacDougall is the President of Encore.org and currently sits on the board of Opiant Pharmaceuticals Inc. She is a Public Voices Fellow of The OpEd Project.

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