Introduction

The UN Secretary-General called gender gap the ‘greatest human rights challenge the world faces.’ To battle this yawning gap, gender-based quotas, also known as corporate quotas have been adopted in several nations. This was first mandated as a testing measure in legislatures and local bodies, and later they have been implemented by corporate groups as well. These quotas aim to counter women under-representation by obligating corporate bodies to seek encourage women for senior roles within their group.

Corporate Quotas: The Why

Per Latura and Weeks, the adoption of such quotas leads more attention towards gender inequality and pay gap, by mainly two reasons: firstly, the identity reason, where more women in senior positions means much more awareness on the pay gap within the firm and the critical mass of women will make it easier for women to advocate for work-family balance and pay gap; secondly, the spillover reason, whereby quota itself leads to policy feedbacks, through which men and women in the company leadership become aware of existing issue through the implementation of the quota itself. Pande and Forde, in their casual analysis of India and Norway, state that it has been observed that gendered quotas reduce gender discrimination in the long term. It also acted as an effective way in increasing female participation in leadership positions within political parties. Meanwhile, in Norway, the introduction of board quotas, even though in the beginning appeared to adversely affect short-run profits of the firm, it ultimately led to healthy wages and better employee initiatives within the firm, especially for women. Furthermore, it was found that the affected parties, which are the male incumbents or male employees, strategize accordingly to respond to the gendered quotas. Women quotas in politics also saw a change in the perception of women in leadership roles within the voters as well.

It has also been noted that corporate quotas help to remove hiring biases and obstacles women face in companies. These biases have been identified as three metaphors:

1) the glass ceiling metaphor: the ceiling refers to the various obstacles that women face, while glass refers to the fact that often such obstacles are invisible and not easy to identify,

2) the glass cliff metaphor: this refers to when companies promote women to senior position only during turbulent or problematic times, when the position has already become less attractive to men.

3) the sticky floor metaphor: this refers to instances in most companies where women are often left to occupy the lower rungs of the corporate hierarchy, meaning that they are stuck, with little to no visibility. Corporate quotas help to overcome these challenges through better participation of women in the workforce and better pay as well.

The Implementation and its Challenges

The biggest debate that corporate quotas have faced is whether such measures must be introduced company-wide or only for the senior managerial positions. There are counter arguments which state that company-wide quotas will necessarily lead to stigmatization of female employees majorly on the meritocracy debate and that female employees are only there are for statutory compliance purposes. It has also been observed in Norway, that many companies who had group-wide quotas did not necessarily provide equal pay to women. However, merely providing quotas in senior positions has also seen their de-merits, majorly due to the absence of the trickle-down effect. In Norway, it was observed that even though 40% of the board seats were held by women, the positive effects did not reach the lower levels of the company. The biggest example of mere statutory compliance being committed through quotas is in India. Section 149(1) of the Companies Act, 2013 states that “such class or classes of companies as may be prescribed, shall have at least one woman director.” However, in reality, male-dominated companies started appointing one female director just for the sake of compliance and not to bring real change. Furthermore, in 2018, the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulation, 2018 made it mandatory for all top 1000 listed companies to necessarily appoint an independent female director. However, a mere statistical increase in representation does not necessarily mean real representation. Furthermore, the whole concept of corporate quotas also falls short of addressing the issue of equal pay. Most scholarly articles have run on the assumption, that mere increase in female participation would mean better and even equal pay for women. However, with no statutory requirements obligation private entities to provide with equal pay, corporate quotas do not mean better pay policies in the company. In fact, in Germany, it was observed that many female employees were employed at comparatively lower wages just to meet the local statutory requirements of having 15% of female employees in the company. In NM Thomas v State of Kerala, the Hon’ble Supreme Court observed that equal opportunity includes every matter directly affected by or incidental to employment, including initial appointments and even any gratuity leaves. However, the concept of corporate quotas does not properly guarantee the same, leaving many important aspects of healthy employment in doubt.

The Way Forward

Perhaps, the first step towards making better corporate quotas is to create awareness within companies for the same, which can be done by the Ministry of Corporate Affairs, by inviting affluent entrepreneurs to talk on the same. Furthermore, mere obligation to provide quotas is not enough. There must be provisions for minimum wages, as against the normal wages provided by the company, that must be provided to those appointed through such quotas. Moreover, real female participation in decision-making processes must take place, and workplace ethic rules for the same may be drafted to assist in it. A change of opinion within corporate groups is required, as it has been found psychologically, that women are better suited in long-term decision making and have been especially helpful during crisis management, due to their tenacity to not act up on urges but think rationally. Companies with women CEOs also saw better workplace environment, which boosts employee morale, leading to better work efficiency. Lastly, companies (having a turnover of more than 100 crores) themselves must make provisions of having women in senior leadership positions, such as the CEO, COO and CMO every tenth financial year given that the incumbent leaders proved to be insufficient. This is likely to motivate women to work harder and stay for longer in companies as well. Growth within the company must be incentivised for both men and women equally. In this way, the problem of diversity and equal pay may be solved.

**The views and opinions expressed in this blog are solely those of the author.**