Women Are Making Progress… Let’s Not Allow Government to Get in Their Way

Women frustrated by workplace challenges are sometimes invited to imagine how much better it would be if women held the reins of corporate power. Female bosses would treat employees better, providing higher wages and superior benefit packages with greater flexibility. These generous policies would improve the bottom-line, as satisfied employees perform better, bolstering profitability. Of course, women would end sexist policies against other women, so women would rise through the ranks and have insights into female customers (who make most major purchasing decisions today), further improving company performance.

That’s the dream anyway. And it may—in part at least—be reality. Writing in The Atlantic, Alana Semuels highlights encouraging research on how employees and businesses fare when women are in charge:

…women who are high-performing and already successful tend to see their prospects improve under a woman’s leadership.  In one study, for example, a group of Italian researchers looked at the compensation of individual workers at big Italian manufacturing firms between 1982 and 1997. They found that female leadership had a positive effect on wages for women in more senior roles (and, as it happens, that firms with more women leaders performed better).

What causes this? The study’s lead author Luca Flabbi, a professor of economics at Georgetown, told me that he believes that women are better than men at reading other women and assigning them to the jobs commensurate with their experience. When a female executive replaces a male executive at a firm, she can better see the talent of senior women and put them in positions that match their talent. Since this is a better fit for these women, they do better work, and enhance the firm’s performance.  “She puts them in more productive positions, and she is right, and that’s why the performance goes up,” he told me.

Semuels notes that it’s not all good news for female employees. Research also suggests that women at the lower end of the salary and performance scale fare worse under a female boss. Yet that result isn’t necessarily a surprise or a bump on the road to women’s advancement: Female supervisors may look past sexist stereotypes to promote high-achieving women, but they may also feel less constrained by concerns that they will be charged with sexism if they demote a poorly performing female worker. That’s progress too. Treating all workers as individuals and recognizing achievement (and the lack thereof) regardless of gender should be the goal.

That’s also why Semuels errs in suggesting that Norway is a “good testing ground” for what happens when women are in charge. As she explains, Norway has a law requiring that public companies’ board of directors are at least 40 percent female. So, at least when it comes to such statistics, Norway appears ahead of the game in terms of women’s progress. But studies of Norway have found that the law has had only a limited impact, helping a few women at the top, but changing little else. As Semuels put it:  “There’s no evidence that the quotas had any effect on women lower down in the companies, nor that the companies hired more women. They also found no evidence that women were inspired to go to business school, pursue business careers, or delay having children to ‘fast-track’ their careers once they saw more women in the boardroom.”

That’s hardly a surprise when you consider how such quotas work in the real world. A woman worker who knew that management had been required by law to give a set number of board positions to women would be unlikely to think that compliance with this quota represented a new attitude toward working women. She’d likely (and rightly) assume that those new female board members won’t be taken as seriously as those who had been there before the law was passed. Moreover, like any quota system, such a law might even backfire by tainting the achievements of women leaders across the board. Perhaps some of those Norwegian women deserved those board positions on their own merits, but the mandate will lead many to assume that they got those top slots at least in part their because the company had no choice and those women aren’t as qualified as the male board members who are there in spite of the deck being stacked against them.

In fact, Norway should be a cautionary tale of how not to try to advance women in the workplace. Far better for the slow but steady increase in female corporate leadership to continue naturally than to short-circuit that process with a government mandate.

Yes, growth in the number of female executives at major companies may be slower than many would like. But it is heading in the right direction and we can expect that to continue as more women rise and show that they are capable, successful leaders. That’s great news not just for women workers, but for everyone who will benefit from a stronger more dynamic economy that’s putting people’s talents, regardless of their gender, to better use.

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