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Business and Professional Ethics Journal

Volume 37, Issue 1, Spring 2018

John Dobson, Mahdi Rastad
Pages 1-12
DOI: 10.5840/bpej201792964

Women on Boards
EU Board Gender Quotas, and Why the US Should Avoid Them

In recent years, the US, UK, and Continental Europe have pursued board gender diversity through markedly different means. Several European countries have imposed mandatory quotas, whereas the UK and US are relying on the endogenous mechanisms of social pressure and shareholder proposals respectively. Despite their obvious allure as a means of bringing about rapid change, evidence is mounting that European board gender diversity quotas may yield various deleterious side effects; and quotas may not be as successful in their core aim of promoting gender diversity as initial broad statistical measures indicated. In this paper we critique the European quota regime, and consider US shareholder proposals as an alternative change mechanism for improving gender diversity in corporate boards. We note the lack of shareholder representative democracy in Europe and conclude with the policy recommendation that, rather than extending quotas, European governments should focus on empowering shareholders.