Diversity is getting better. Women now make up over a third of the top positions at the UK’s 350 biggest companies. The number of women on boards has risen 50% in five years. The board represents shareholder interests, picks the CEO, who is accountable to them. Its members mirror the company. Unemployment decreased by three percentage points for all ethnic-minority groups since 2004, narrowing the gap with white workers.
Yet, diversity is stagnating. Mandatory gender pay gap reporting has been delayed until October 2021. Because of coronavirus. Yet, we already know the pay gap will have worsened. Also, because of coronavirus. It has disproportionately hit women’s careers and we can’t even know which employers have failed to support women in the pandemic. The number of black leaders in Britain’s top companies has fallen below 2014 levels. There are no black executives in the top three roles at Britain’s 100 biggest companies (the FTSE 100).
Quotas are designed to ensure diversity. They mandate a certain percentage of jobs go to underrepresented groups. This solves the problem that flows from awarding jobs and promotions based on merit: It ignores inequal opportunities for different people. That is the only problem quotas solve. They ignore the underlying problems; the attitudes that have caused a lack of representation.
Numbers do not necessarily lead to action. This is due to tokenism. Hiring one person from a minority just to prove they are not discriminatory. Being in the minority means they are less likely to influence decisions or feel confident enough to dissent. Quotas can ensure diversity. Quotas cannot ensure inclusion.
Yet, perhaps this diversity is better than nothing. It can help deserving people get a foot in the door. Role models and mentorship play a huge part in creating a diverse pool of talent. They debunk all-white, male stereotypes in certain positions. Quotas do force change in an area that is very stubborn. Most graduates are women, but they are scarcer in prestigious positions. Ethnic minority directors make up 8% of the board members in the FTSE 100. Compare that with 14% of the general population in Britain. It’s very tempting to want to flick a switch and fix this.
California imposed a quota of the minimum number of women on company boards. Bloomberg reports that women occupied 45% of new seats at Russell 3000 companies in the state, compared with 31% generally in the US. California is now looking to impose quotas based on race representation. This can only be good news. Time and time again it is proved women are more likely to be mistaken for lower-ranking employees. We scrutinize them more harshly when applying for typically male roles. Quotas do not force recruiters to hire those less qualified. They force them to acknowledge these biases.
But Quotas are an illusion to fast progress, which does not exist. Retention in these roles may be uncertain. If policies like maternity and paternity leave and flexible working structures are not re-examined, it will still lead to a loss of talent. In Norway, after a 40% quota of women on board seats was set up, this did not translate to lower levels in companies, in which women remained underrepresented and underpaid. Though there were women in the board room, they are likely to be privileged in other senses; middle class, white, etc. Women on boards does not mean diversity of thought. Often these women have similar experiences and values as the men in higher-up positions. This explains why there is actually little evidence to prove diversity affects company performance. Self-censoring from those who have different views is a further reason.
Meta-analysis studies show a small positive relationship between company performance and diversity. Other research, which shows diverse companies do better, do not take into account other reasons for the growth. In any case, it is impossible to prove causation. Of course, better representation should be a goal, not because of profits, but because of social good. But a lack of change from quotas suggests true inclusion is far off because numbers just show the outward appearance of diversity but can’t show the spirit of it.
Yet, investors and funds, who finance firms, demand more diversity. Britain’s naming and shaming strategy, as opposed to many European countries’ quotas, proves that reputation matters. The share of women in director roles increased significantly to 27% in 2017, though lower than in quota-imposing nations. Public interest in social justice has only increased after the pandemic highlighted and worsened inequalities. Yet, it is interesting to wonder whether this will affect our unconscious biases and the micro-aggressions people suffer.
The BBC has recently announced diversity targets based on class is thinking more on the right lines. Given the pandemic has disproportionately affected those locked down in massive houses and those in cramped council flats, this has come at the right time. It acknowledges those in leadership positions come from the same privileged feeder pools. Often companies lament quotas because they say the talent isn’t there. This ignores the part they play in discouraging and losing that talent.
Attention should be given to all levels as analysis here can show how and why certain people don’t reach the top jobs. Though we rarely see data for these roles making any headlines. But given the inherent problems with quotas, imposing more at lower levels is still not the solution to achieving more diversity and inclusion.