Spotlight on gender quotas: a controversial solution
of survey respondents identified gender quotas for boards and leadership as a potential measure to address barriers to women progressing to leadership roles.
There are mixed views on whether gender quotas are an effective solution to increasing female representation in business leadership. While some see it as a necessary step to addressing inequality, others argue that it could lead to tokenism and unfair treatment of both men and women. 22% of survey respondents identified gender quotas for boards and leadership as a potential measure to address barriers to women progressing to leadership roles. This was a topic that elicited a range of opinions from our leadership panel, making it, important to explore the potential benefits and impacts of this approach, especially considering the success stories from countries that have implemented quotas.
Policy change in action: Lessons from overseas
Several countries and economic blocs have implemented gender quotas to increase female representation in corporate boards. For example, Norway, France, and Germany have all introduced legislation requiring a certain percentage of women on corporate boards. Under the EU Women on Boards Directive, by mid-2026 every listed company within the European Union needs to have at least 40% female non-executive directors or have a female representation of executive and non-executive of a minimum of 33%.
The Norwegian Parliament adopted new legislation in 2023 stipulating gender quality on boards for both public and private companies meeting a size or turnover threshold17. The results have been promising, with these countries seeing a significant increase in the number of women in leadership positions. This suggests that quotas can be an effective tool for driving change and creating more diverse and inclusive workplaces.
Unintended consequences of quotas
However, it's important to consider the psychological and cultural impacts of quotas. Some argue that quotas may stigmatise women and suggest that they require special treatment to succeed. This could potentially undermine the confidence and self-belief of female leaders and reinforce gender stereotypes.
Additionally, there is a risk that quotas may lead to resentment and resistance from men, creating a divisive environment in the workplace. Therefore, it's crucial to carefully consider the potential consequences and ensure that any quota system is implemented fairly and effectively.
The UK's approach: targets vs. quotas
In the UK, the approach has been to focus on targets rather than mandatory quotas. The Financial Conduct Authority has set a target for FTSE 350 businesses to have at least 40% female representation on their boards18. Firms are encouraged to set internal deadlines and ‘comply or explain’. This target-based approach aims to increase diversity while avoiding the potential negative consequences of mandatory quotas. Between 2011-2023, representation of women on FTSE 350 boards rose from 9.5% to 42% in 2024.
However, growth in the number of female Chief Executives in the FTSE 350 has not been as pronounced - in 2011, 15 CEOs were women, and that number has risen to 21 today19. In 2023, research by the campaign group Women on Boards found that nearly a fifth of FTSE 100 firms (19%) do not meet the FCA’s 40% target20. This has led to calls for more stringent measures, including the enforcement of quotas, to accelerate progress and ensure that businesses take diversity seriously.
What our panel said
“It's a chain reaction that we need. I wish it didn’t come to board quotas. However, they could prove really useful because that chain reaction has got to start somewhere. Women need to sponsor more women. I think we've got to disrupt companies that are stuck in their ways by imposing things on them for a moment. You see the success that Scandinavia has had with that.”
– Rebecca Rosmini
“In principle, I don't agree with quotas. Promoting just to meet a number is not the right way because it gives the wrong message to everyone else. And the woman may feel she's only there because of the quota, and therefore doesn't feel she has the skill set. I think targets are good.”
- Cathy Stewart
“I don’t agree with board quotas, but then at the same time, we have to force those that aren't culturally aware and aren't being diverse to open their minds, and make sure that they are considering everybody for the role. You have to force it upon boards, so they actually appreciate the breadth of expertise.”
- Lea Cheesbrough
“I think [board quotas] have their place. It is important to know and assess what is perhaps psychologically going on subliminally in the organisation. And I think quotas just help you figure out what's going on.”
- Kim Simmonds
“I do get very frustrated when you hear comments to the effect of, someone's been put in that senior role because they're a woman. It should be because they're the right person for the job. I've always been of the opinion that you should hire for attitudes and then train for skill.”
- Heidi Carslaw
Action needed
While gender quotas remain a controversial topic, the success stories from other countries and the slow progress in the UK highlight the need for continued discussion and exploration of this approach. Quotas for female representation on corporate boards garnered support from our survey, with 35% of respondents advocating for this measure from policymakers. Quotas may not be the ideal solution, but they could be a necessary stepping stone towards creating a more equal and diverse business landscape. The incentive lies in market forces: board compositions are under scrutiny, pay gaps are published annually, and attracting talent necessitates diversity and inclusion as key components of the employee value proposition (EVP). The risk, however, is that slow or declining representation could lead to mandatory quotas.
17 The European Women on Boards Directive, Institute of Directors, p1
18 Diversity and inclusion on company boards and executive committees, Financial Conduct Authority, p.6
19FTSE Women Leaders Review: Achieving Gender Balance, FTSE Women Leaders, p.9
20 FTSE Women Leaders Review: Achieving Gender Balance, FTSE Women Leaders, p.27