Via a tweet from Ruth Bender which led to a post on Robert Goddard's excellent Corporate Law and Governance blog, we learn that the government is getting terribly worried about gender equality in the boardroom.  And then there's this, from the Guardian:

The European commission has warned companies that if they do not move voluntarily to ensure gender balance on executive boards, it will force them to.

Fundamental rights commissioner Viviane Reding told the European parliament: "Equality in decision-making is not yet a fact ... I do not rule out the possibility of putting forward legislation in this area."

I think this is based on a very dangerous and flawed line of reasoning.  Broadly speaking, it goes like this:  Boardrooms are full of white, middle class, public school educated men.  Boards sometimes fail to take account of major risks because they get sucked into this sort of 'groupthink'.  Therefore, what's needed is some outside influence from a more diverse range of people.  Women are currently underrepresented in boards.  Therefore, we need to ensure that there are more women in the boardroom.

While this might be compelling, the conclusions cannot be derived from the axioms.  It's far from obvious that the way to fix short-sighted boards is to force them to choose from a smaller pool of candidates without any regard for their skills.  Nor is it clear that, once these outsiders have been thrust upon boards, they'll be able to exercise any influence whatsoever.

What's needed is some evidence.  And a good place to look would be the public sector, because public bodies generally have the luxury of playing social science like this, in a way most private bodies do not.  So, it's instructive to look at the European Union's structures and its own gender balance.

The European Commission has 9 women and 18 men.  That's hardly balanced (although some might argue less imbalanced than many company boards).  The Commission also includes Baroness Ashton, widely mocked for being pitifully underqualified for her role as EU Foreign Affairs Head Honcho.

The European Parliament has 256 women and 479 men.  Again, horribly imbalanced.  Yet one cannot claim that this merely reflects the whims of sexist voters; company boards are subject to elections as well.

It seems extraordinary that the European Union should be pressurising company boards to take on more women, without substantive evidence, while itself being so unwilling to address its own gender imbalances.  If it's really the right course of action to be taking, and I remain unconvinced that it is, the EU must move first.

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Filed under: Corporate governance, Politics with tags baroness ashton, diversity, european union, ruth bender