Gender Quotas for German Companies – Is the U.S. Next?

One by one, European countries are forcing strict quotas on companies to increase the number of women in their boardrooms.

If parliament approves a bill adopted by Chancellor Angela Merkel, Germany will soon follow France, Italy, Spain and others in implementing mandatory quotas that will dramatically alter the leadership landscape at thousands of companies. 

You can imagine my initial reaction to the move. I was appalled. Gender quotas are by definition discriminatory, regardless of their intent. I can only imagine what comes next. Quotas by race and sexuality, of course. Religion, probably. Then what? Height, weight, maybe even hair color?

Someday there’ll probably be a state-sponsored spreadsheet with quotas for every possible combination. I wonder what percentage of CEOs will have to be short, obese, redheaded Buddhists?

When will it stop?

When Europe has succeeded in rendering everyone perfectly equal regardless of ability; breeding every last ounce of individualism, meritocracy, personal accountability and competitive drive t out of their culture; abolishing words like “individual” and “I” from the language and making Ayn Rand a true prophet.

After settling down a bit I got to thinking, why are they really doing this? I mean, what problem are they trying to solve? Is it the right problem? Will it be effective? Should it be? And who knows, maybe I’m wrong about this. Maybe they’re onto something. Not likely, but stranger things have happened.

It would seem obvious that the problem they’re trying to solve is a bias or prejudice against women on non-executive supervisory and executive boards, the European equivalent of board directors and executive officers in America.

But if you look at the data, that doesn’t seem to be the case. According to research from Grant Thornton International, women hold about 24% of senior management positions globally while 21% of new graduates joining those companies are women. That sure seems about right to me.

Meanwhile, the quotas to be imposed in Germany are 30% women in leadership positions. Clearly, demand is going to far outstrip supply, meaning companies are going to be discriminating against more qualified men to find enough women to fill those roles. That can’t be a good thing.

No matter whose data you look at, the problem is far worse in STEM (science, technology, engineering and math) and other male dominated fields where the percentage of women graduates is far less and yet the quotas remain rigid. Not only that, it seems that 30% is just a starting point on the way to “true equality.”

So the truth is, quotas don’t address the real issue. It’s a supply problem.

If the quotas are meant to deal with the question of fairness, consider this. Coddling anyone – children, minorities or women, for that matter – by rewarding them with anything they didn’t earn or that others are more qualified to receive creates a victim or entitlement mentality that actually holds them back. That’s hardly fair to them.

In an interview a few months back, rock star Sting said that, instead of leaving trust funds to his six kids, he taught them the importance of a strong work ethic, to stand on their own two feet and succeed on their own merit. “I am determined that my children should have no financial security. It ruins people not having to earn money,” he said.

Amen to that.

While some have suggested that leadership diversity improves company performance, those arguments usually come from organizations with a vested interest in the outcome. I’ve never seen any credible, objective or conclusive analysis on the subject. And since when is it a federal government’s job to dictate how companies perform?

Perhaps I’ve got this all wrong. If women aren’t being discriminated against and force-feeding quotas doesn’t really help companies or women, maybe Europe’s trying to solve a different problem. Last month, Merkel told a group of women executives, “Executive positions are desirable because they mean power and power is, after all, a good thing.”

Now I think we’re unto something. I bet you didn’t know that Merkel flipped and actually helped to defeat nearly the same bill in the German parliament last year because an election was coming up and that particular measure wasn’t politically expedient for her and her party at that time.

That’s what this is really all about. Power, politics and political correctness. Bureaucracy at its best. Could it happen here? Should it happen here? God help us.