Today, women account for 47% of the United States labor force and 59% of the college-educated, entry-level workforce. Yet women hold just 16.9% of Fortune 500 board seats, with women of color holding merely 2.8%. In order to address this unreasonable and unjust imbalance, as well as to provide women with successful role models, the U.S. needs to pass a bill that requires large corporations to fill at least 40% of their board of directors with self-identifying women.
While there are countless reasons why diversity is vital for good decision making, the main argument is that it shifts the perspective of corporate leadership. Appointing board members of different gender identities has consistently proven to broaden the conversation and choices companies make and therefore increases the positive impact that these large corporations can have. Their actions are more likely to highlight the true positions and opinions of the general public if half of their board is female. Additionally, young women need role models in the business world. Without examples of people like them who have achieved success in their career, it is nearly impossible for women to move forward.
Not only is appointing female directors relevant to a company’s overall decision-making and gender diversity, numerous studies have proved that boards comprised of more women are more likely to achieve economic success. When Fortune 500 companies were ranked by the number of women directors, those in the highest quartile reported a 42% greater return on sales and a 53% higher return on equity. Anything guaranteed to increase profits that drastically should logically be desired by companies, yet the fact that this involves shifting power over to women is apparently cause for alarm. The reluctance to bring women onto boards is not grounded in economic strategy. It is simply more evidence of the pervasive sexism in the corporate world.
CEOs claim to recognize the importance of appointing directors of backgrounds, ages and expertise, yet fall short when it comes to gender diversity. A 40% quota aims to bring the issue of female representation to the front lines and make people recognize the resulting benefits.
It’s not as if a quota like this would be ineffective: countries that enforced similar quotas, such as Italy, Spain, France and Germany, have proved to have overwhelmingly more women on their board seats. The pioneer of this movement was Norway: after enacting a quota in 2006, their boardrooms skyrocketed from less than 7% female to 42% female in only ten years. That’s almost a 20% annual growth rate. If the same rate of change were applied to the Fortune 500 list, U.S. boardrooms could be up to 50% female before current high schoolers are out of college.
And by that time, it will be millennials filling those boardrooms. Our generation will be taking charge of the U.S. economy. Our generation will be the ones proving that ancient gender hierarchies have no place in deciding our future.
In an ideal world, businesses would all be meritocracies and diversity on boards would occur naturally. There would be no need for quotas. But we do not live in an ideal world.
Instead, our institutional systems are designed to pander the rich, white males who have maintained power for so long. As the rising generation of America, it is our responsibility to kick-start the movement towards diversity. We cannot rely on this sexist system to fix itself. We are obligated to take action.