Quotas for female bank chiefs to be dropped

Proposals demanding that a third of Europe’s bank board directors should be women are likely to be dropped following apparent opposition from Viviane Reding, the EU’s justice commissioner, who has been leading a debate over boardroom gender equality. Mark Spinner, partner at international law firm Eversheds, comments:

“Generally speaking, there is currently little widespread support for the introduction of quotas. The vast majority of directors and industry bodies are in favour of making sure that the correct individuals get the job because of their experience, qualifications and value that they bring to the job rather than as a reaction to an arbitrary diversity quota. Whilst most support diversity, it is felt that positive discrimination on the basis of gender, ethnicity or nationality, rather than by reference to a ‘fitness for purpose’ test would be wrong.

“Having said that, there is also a feeling that if companies/governing bodies do not get their house in order voluntarily then the regulators/legislators will bring in compulsory quotas in order to accelerate the pace at which appropriate levels of diversity are achieved.

“The real challenge for companies wishing to improve diversity on a voluntary basis is that the cards are currently stacked heavily against broadening the gene pool from within which new directors are selected. In most cases, the selection criteria used effectively restricts the talent pool from which to select to a small number of candidates who already have existing experience. Unless the selection criteria are changed so that additional weighting is given to different skills sets/abilities more readily associated with female candidates, the current situation will not change. Add to this the small selection pool, and there is no wonder that research shows that, at the current rate of change, it will take over 70 years to get to an acceptable level of diversity.

“In order to secure the services of talented female candidates it is also important that companies look outside the traditional talent pools from which directors are selected. By looking at the civil service, health and/or education sectors (all of which have a healthy number of very talented female executives), companies would find it much easier to find suitably qualified and available female candidates (as well as male candidates) from which to select.

“Quotas are not the answer but unless companies get to grips with the question of diversity it is likely that they will be applied.”