Quotas are unpopular among business leaders. But that has nothing to do with whether they work. For example, in March this year, women achieved parity in paid positions on Victorian government boards. It was a first for the state. Victoria's Premier Daniel Andrews, set the parity target in 2015 and held government ministers accountable to it. When the target was hit, Fiona Richardson, minister for women, told The Guardian that this milestone was “proof setting targets worked”.
For boards, issues of diversity are not confined to gender. Boards are currently being challenged to attract greater diversity in culture, age, educational background and specialised skills (such as technology). Targets and quotas are one means of responding to this challenge.
Of course, a quota is not the same as a target, as a quota is a target that is mandatory and has penalties for non-compliance. Semantics aside, the point is that quotas, targets and even laws are decidedly ineffective in achieving change. There are laws against discrimination – whether on gender, race, religion or sexual preference – and there have been for 25 years. The ASX introduced a diversity policy to its Corporate Governance Principles and Recommendations in 2011, that recommends setting targets.
These measures have achieved so little change that it is astonishing. So, what is the problem?
The answer is that none of us (men and women) like affirmative action – even when we agree with it, writes Dr Cordelia Fine, professor of history and philosophy of science at the University of Melbourne, and author of many books debunking gender myths, her latest being Testosterone Rex.
Fine tells us there is “psychological fallout from affirmative action.” Decades of research from the US shows that even those who agree in principle with affirmative action, don’t like it in practice. After reviewing this research in relation to women, Melbourne Business School researchers Dr Jennifer Whelan and Prof Robert Wood conclude: “Women hired under affirmative action practices are in general seen as less competent and deserving of their position, and the women themselves [have] similar perceptions.”
That’s right. No-one is happy. Everyone sees women who are given opportunities through affirmative action as less competent, even the women themselves. And this is not supported by any evidence. However, their uncertainty is then reflected in their behaviours, which can lead to them underperforming in their role.
This leaves boards in a difficult position. But it does provide insight into how boards might use quotas more effectively. Attitudes to quotas at the top end of corporate Australia are changing. Woolworths chairman Gordon Cairns, chairman of Scentre Group Brian Schwartz AM FAICD and former Spotless chairman, Margaret Jackson AC FAICD, all support quotas to some degree. It helps to know therefore that their main challenge is not in meeting their goals; it is getting everyone, including their successful candidates, to believe they deserve their position on merit. If directors do not address this belief, new appointments may underperform. And that doesn’t help anyone.
It’s easier said than done, of course. Changing beliefs is difficult stuff. It comes down to the fact that we are all skeptical about quotas. The answer therefore does not lie solely in a new policy or employing a new recruitment company. It lies in finding ways to challenge those deeply held beliefs that undermine change.
Cairns, Schwartz and Jackson have set the course. Directors are ideally placed to lead this change. Few could have achieved their ambitions successfully without a willingness and capacity to challenge beliefs that do not serve them. Most successful people are experts in shifting their own beliefs, accessing whatever resources – research, training, mentoring – they require to achieve change, and deploying these resources to others, such as the executive, when needed.
As with most beliefs, change starts with acknowledging the problem. That alone is a big step forward. The next few years are the hard part. Before long, positive role models will do the work of challenging old stereotypes and biases, and proving to everyone that targets and quotas do not undermine appointments on merit; they are just a bridge to take us from one set of beliefs to another.