There are two new women in the boardroom of Italian automaker Fiat -- Joyce Victoria Bigio and Patience Wheatcroft.
It's great news, but don't get all warm and fuzzy over Fiat. The company was pretty much strong-armed into adding women to its all-male board because of a new law that requires Italian firms to have at least one-third women board members by 2015, according to a story in the Wall Street Journal today.
Other countries, including Norway, have imposed such quotas and many have reaped the benefits of having more women voices in the big chairs. But it's not even something that's seriously considered in the United States, even though less than 20 percent of board seats are held by women at U.S. firms.
In fact, some firms won't even consider women board members when asked by their shareholders to just think about more gals for board positions.
Last year, Calvert Investments and Connecticut’s Treasurer tried to get Urban Outfitters to agree to consider bringing women and minorities onto its seven-member, all-white male board.
“What we asked was that every time they consider a slate of directors, they also consider a woman and or a minority as part of that slate,” said Aditi Mohapatra, a senior analyst with Calvert, an investment management company that focuses on socially-conscious investing said at the time. The shareholder proposal didn’t require that more diverse candidates be appointed, she noted, just that they agree to make a concerted effort to at least think about diversity.
Urban Outfitters didn’t budge.
“They said, ‘We don’t have any diversity problem,'” Mohapatra said.
U.S. legislators may not have the feistiness of their Italian counterparts to make companies care. The best they could do was a 2009 Securities & Exchange Commission rule requiring that companies disclose how diversity is considered when new board members are nominated. Unfortunately, the rule didn’t mandate that companies actually have a diversity plan, Janice Ellig, co-CEO of executive search firm Chadick Ellig, told me a while back.
“I say put more teeth into those rules,” she demanded.
But Ellig stopped short of recommending U.S. companies be forced to meet gender quotas on boards, or in management jobs.
Unfortunately, we need to push the envelope here to change the very male board landscape. Italian legislators, and lawmakers from other countries, realize change won't come unless some diversity earthquake creates a seismic wave.
In Norway, board quotas have made a difference.
According to an article in the UK's The Guardian written Agnes Bolsø, associate professor at the Norwegian University of Science and Technology:
It is very hard to analyse the impact on profitability, and research on the economic effect of more women on boards is inconclusive. What is beyond doubt, however, is that the policy has paved the way for women to influence corporate decision making.
And that influence may be exactly what Corporate America may need to help it work for all employees, and not just executives who are pulling in record paychecks.
A 2011 study of Norway's quotas by professors at Kellogg School of Management and the University of Virginia titled "A Female Style in Corporate Leadership? Evidence from Quotas" found "a relative decline in annual profits over assets associated with the quota" but the reasoning shed light on how women may look differently at the corporate world than their male counterparts:
Decomposing the change in profits, we identify increased labor costs, from fewer layoffs and higher relative employment, as the primary cause. This suggests that compliance with the quota was costly for firms in the short term, but raises important questions about the long-term impacts. The fewer layoffs may reflect a more stakeholder-oriented attitude on the part of female directors, or a more long-term perspective if women are more willing to incur higher short-term labor costs to increase workers’ productivity in future periods.
Translation: Women may not look to just fire people as a way to prop up the bottom line.
This concept sounds foreign in today's economic environment, but it may be what brings back a bit of equity to the business world. To get there, our nation needs a big push.
The WSJ piece by Giada Zampano quoted a member of parliament named Alessia Mosca who put it best: "We needed a shock to the system. The hope is that this will set off cultural change."
(This article first appeared on CareerDiva.net.)