Gender-specific board quotas have become an end in itself. Even though Norway is the champion of having the highest share of women in the boardroom thanks to its hard quotas, only 7% of the biggest companies have women bosses in 2018. In Britain, France, Germany and the Netherlands, 80-90% of senior management jobs are still held by men.
Against this backdrop, new research by Anna Minasyan at the University of Groningen and Stephan Klasen at the University of Goettingen shows that beyond the board quotas, incentivised gender-based targets for senior managerial positions are likely to be more effective in increasing the representation of women at the top.
Their findings are based on the study of a South African affirmative action policy that helped to increase the share of black women in top management positions from 18% in 2003 to 45% in 2015 of all blacks at the senior level.
Previous research evidence from Norway and Italy shows that even though board quotas increase the share of women in the boardroom, they do not advance the prospects for women further down the career ladder.
Unlike European countries, South Africa did not only introduced targets for the company boards but most importantly it set targets for top management positions as part of its comprehensive Broad-Based Black Economic Empowerment Act in 2003 (BEE 2003). The practical targets are proportionate to the population shares while the policy targets are set to a minimum of 50% for black people and 40% for black women among black senior managers.
There are no monetary sanctions or direct threats of closure for companies who do not achieve the BEE targets. Yet, the government incentivises firms who do by giving them preferential treatment when doing business with them.
For example, if several companies apply for a license from the government, those who have achieved their targets (based on a score system) get the certificate, while those who lag do not. Over time, failure to achieve the targets can have consequential effects for the business and lead to its closure (indirectly). But only large firms have to comply. This opens up an opportunity for exploring the group-specific improvements attributable to the BEE policy.
Minasyan and Klasen study the intergroup effects of BEE 2003 in South Africa in senior managerial positions using data from 21 years of labour market surveys. They estimate the probability of employment in top positions for black women relative to black men, white women, and white men by comparing the changes for each group before and after the policy as well as for small versus large employers.
They find that black women in South Africa are three percentage points more likely to be employed in top management positions in the post-policy period relative to black men and white women. Relative to white men, their chances become slightly higher once they factor in the temporal changes in the observable factors such as educational gaps.
Given the context, the proportionate representation of whites and blacks in senior management has been more difficult to achieve, attributable to the persistence effects of the discriminatory apartheid policies in the education sector.
If one extrapolates the evidence from South Africa against the previous research findings on board quotas, one can infer that in the absence of education gaps, policies that set gender-specific incentivised targets for top positions are more likely to be effective in improving the career opportunities for women relative to the policies that rely on board quotas only.
ENDS
Contact details
Dr. Anna Minasyan
https://www.rug.nl/staff/a.minasyan/
Phone: +31 655 902 911
E-mail: a.minasyan@rug.nl
Twitter: @AnnaMinasy
Skype: anna.minasyan