The debate of the fairness and efficacy of quota systems heated up this week after German legislators have passed a law requiring the top 100 companies to allot at least 30 percent of the seats on their boards to women within the next two years. The bill also mandated increased in women in upper level positions for some 3,500 companies. The companies could face sanctions if they cannot find enough women to fill the quota.
I have long been a critic of quota systems and this is no exception. While I certainly agree with the motivation behind the law, the emphasis of regulations should be to tear down barriers to women — not to force hiring based on gender. I am a firm believer that the market works against discriminatory values and practices. Women have made amazing strides in business and politics, as vividly shown by the leadership of Germany by Chancellor Angela Merkel.
There is clearly an underrepresentation of women on these boards. However, the way to erase that differential is to guarantee opportunities for women and to combat discriminatory practices in my view.
What do you think?