Mandatory Quotas for Women on Boards of Directors in the European Union: Harmful to or Good for Company Performance?

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Abstract

Impact assessments are an important component of a better regulation programme-an initiative of the European Commission launched to improve the quality and transparency of the EU (European Union) law-making process. In the current article, I take a closer look at the Impact Assessment (IA) issued by the European Commission together with a Directive proposing a 40% obligatory female representation on the boards of directors in European public companies. In the IA, the Commission defined an improvement of corporate governance as one of the objectives to be achieved by the Directive. The Commission claimed that the more gender-diverse a corporate board is, the better it will perform. However, it is questionable whether mandatory quotas indeed have such a positive impact on corporate governance. Here I argue that, to properly assess the impact of a given policy, it is crucial to examine how the policy measure itself interferes with corporate performance. I present both field and laboratory studies investigating the influence of mandatory quotas on company performance, individual attitudes and group cooperation. Next, I discuss implications of these findings for the evaluation of the IA quality as well as the legality of the Directive. The current analysis of the IA shows that despite recent improvements there are still considerable flaws in conducting impact assessments of the EU legal initiatives.

Original languageEnglish
Pages (from-to)35-61
Number of pages27
JournalEuropean Business Organization Law Review
Volume19
Issue number1
DOIs
Publication statusPublished - Mar 2018
Externally publishedYes

Keywords

  • Positive action
  • Gender quotas
  • Impact assessment
  • Company performance
  • Board of directors
  • Better regulation
  • AFFIRMATIVE-ACTION
  • PREFERENTIAL SELECTION
  • IMPACT ASSESSMENT
  • GENDER EQUALITY
  • EU
  • DISCRIMINATION
  • POLICIES
  • JUSTICE
  • OPPOSITION
  • GOVERNANCE

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