Friday, October 5, 2018

The Trouble with Gender Mandates

Some two decades ago Shelby Steele presented the eminently reasonable objection to affirmative action and diversity programs. Anyone who falls within the privileged class, the class of people advantaged by these programs, will be assumed not to have earned their place, and thus, not to belong.

In universities that impose aggressive diversity quotas a new form of prejudice arises. Those who might have gained an advantage, thus who might not have been admitted according to the same criteria, consistently see their achievements disparaged, as though they were not playing by the rules. Regardless....

The argument was cogent and correct. It continues to stigmatize minority achievement today. And yet, no one has really paid it any attention. Universities and even businesses still impose these quotas. And then they cannot figure out why staff members do not get along with each other.

The international left being what it is, that is, impervious to evidence, it has been doubling down on diversity. The latest example comes to us from California, where soon to be departed Governor Jerry Brown has just signed a law mandating a certainly number of females on every board of directors of every California company.

What could be wrong with that?

Liz Peek has the story in The Hill:

Quotas are abhorrent, and possibly illegal, but that didn’t stop California Democratic Governor Jerry Brown from signing into law a requirement that all publicly traded companies in California must have at least one female director by the end of 2019.

By the end of 2021, the number ratchets up to two or three females for boards with more than five directors; noncompliance will generate fines of hundreds of thousands of dollars.

Peek continues:

The message to all women: You can’t get there on your own.

In so doing, Brown was following the example of Norway. In 2008 that small nation mandated that boards be 40% female. What happened then?

The fiat to bring women onto boards generated pushback in Norway, as it has in California. Executives worried that boards would be stuffed with women who knew nothing about their enterprises or that the relatively few women in senior executive ranks would be swamped with requests and would be spread too thin.

Resistance was so keen that some companies shrank their boards so as to raise the percentage of women. Other firms went private so as to escape the mandate altogether.

Let’s see: diversity quotas risk filling boards with women who have been hired for their gender and not their competence. Thus, who would not be capable of doing the job. Naturally, diversity mongers do not care.

That’s not all:

Also, business executives privately worry that there aren't enough senior women to stock those California board rooms. Many of us recall that during the financial crisis, some of the women serving as directors for the nation’s largest banks were later criticized for lacking know-how that might have helped avert the financial collapse.

It was also thought that female university presidents or women who headed nonprofits might have provided politically appealing gender diversity but were not up to speed on the nuances of collateralized debt obligations.

Realistically, a great many people were clueless about the billions in worthless paper that rest on mountains of subprime loans. It wasn’t just females who were failing.

Perhaps these companies would have been more concerned with their balance sheets if they had been less concerned with filling diversity quotas. In Norway, companies have not filled their boards with underqualified females. But, then again, Norway does not exactly resemble America.

Unfortunately, the movement toward board diversity has not produced the desired advances for women in other parts of business. Unsurprisingly, when you force people and companies to do something that they do not want to do, you are likely to receive blowback. The reaction here involves the assumption that women cannot earn their way. If the quotas cost women respect, they will have more difficulty managing or leading. It is very difficult to assume a management position of your staff believes that you did not earn it:

But disappointing to advocates, the rush to feminize the board room has not produced significant gains for women at the lower levels of company ranks.

In Norway, only 7 percent of the biggest companies have female CEOs, while in France, which adopted quotas in 2011, the figure is even lower at only 2 percent. Those figures make the U.S., where some 5 percent of Fortune 500 CEOs are women, look pretty good.

According to a study published earlier this year by the Berlin-based German Institute for Economic Research (DIW), the story is much the same in Germany. The Germans enacted a rule that boards go 30-percent female in 2016, but they have seen no increase in the number of women ascending to senior management roles.

As you probably know, serious research has suggested that companies with more diverse boards of directors are more profitable. If this is true, there would be no need to mandate diversity. Greedy capitalists would be rushing to implement the proposals.

Peek argues that there is no evidence that companies with more diverse boards do better or worse. In the end, it’s all about virtue signalling.

Peek concludes:

Mandating more women on boards thus appears to be a feel-good exercise in this #MeToo era and a politically appealing gesture by Governor Jerry Brown, who is finally retiring in January. But it won’t speed up women’s ascent to the C-suite; they’ll have to earn that, and my guess is that they will.

That will be better for women, and the boards on which they serve.


Dr. Irredeemable Dreg said...

Your comments on the banking meltdown dredged a memory out of my hippocampus. Candidly, it's been several years since I read the modifications to the Comminity Reinvestment Act instituted by the Clinton Administration via his HUD Secretary, now Gov Cuomo. In short, the new regs required banks to hire a political officer, a commissaire politique, to ensure Diversity in mortgage lending. We certainly got that, in spades.

I'm sure, if CA's law passes legal muster, Gov M. Beam will be equally successful. We will see more Stage V, fully converged (Vox Day) companies like Google. To wit:

"The corporation devotes significant resources to social causes that have absolutely nothing to do with its core business activities [...] The CEO regularly mouths social justice platitudes in the place of corporate strategies and the marketing materials are so full of virtue-signaling and social justice advocacy that it becomes difficult to tell from them what the company actually does or sells."

Sam L. said...

If I identify myself as a female woman of that gender, can I be a board member? It is Verboten to deny my gender!

Dr. Irredeemable Dreg said...

Sam, anybody with a front hole is fem-eligible.

Sam L. said...

Doc, let me check. By golly, I DO!

Sam L. said...

And, shouldn't the header say "The Trouble with Gender Womandates"?