Reference no: EM131049386

ETHICAL DILEMMA

That women are underrepresented on boards of directors is an understatement. In the United States, only 15 percent of board members among the Fortune 500 are women. Among the 100 largest companies in Great Britain, women hold approximately 12 percent of board seats, a representation that has changed little over the past 5 years. In the European Union (EU) more generally, only 9.7 percent of the directors of the 300 largest companies are women. In China and India, the figure is roughly half that. In response to such underrepresentation, many EU countries-including France, Spain, and Norway-have instituted compulsory quotas for female representation on boards. Great Britain has guidelines and recommendations. A 2011 official British government report recommended that women make up at least 25 percent of the boards of the largest British companies. Under the recommended guidelines, companies would be required to announce their board composition goals to their shareholders and state clearly how they plan on meeting them. France passed a law in 2011 that requires large companies to fill at least 40 percent of board seats with female members within the next six years. Spain has a similar quota in place.

Questions

1. Given that women participate in the labor force in roughly the same proportion as men, why do you think women occupy so few seats on boards of directors?

2. Do you agree with the quotas established in many EU countries? Why or why not?

3. Beyond legal remedies, what do you think can be done to increase women's representations on boards of directors?

4. One recent study found no link between female representation on boards of directors and these companies' corporate sustainability or environmental policies. The study's author expressed surprise at the findings. Do the findings surprise you? Why or why not?