Equbusiness book VERSION 28SEPT2023 - Flipbook - Page 95
It is evident that a nuanced approach is prevalent, emphasizing a "comply or explain" strategy for gender diversity
quotas, which seeks to balance legislative pressure with corporate autonomy. Legislators appear disinclined
towards rapid, forceful alterations to corporate boards. Rather, their modus operandi centers on setting examples
that could reshape corporate cultures and societal attitudes toward gender-diverse boards. An underlying factor
restraining precipitous legislative moves is the economic reality. This concern is evidenced by the potential
unforeseen consequences that imposing quotas can cause for the economy and corporations. Especially during
periods of economic strains, governments have to make quick and relaxing decisions for the corporations, which
is the opposite of what quotas are mandating. The dilemma legislators face boils down to a choice between
promoting equality and preserving economic stability. Opting for equality entails catalyzing pivotal changes in
corporate structures to foster gender diversity, while an economic focus implies non-interference in corporate
governance.
In this delicate balance, legislators navigate the economic legitimacy paradigm. This approach posits that
legislators must harmonize profit-oriented interests with a commitment to human rights. The economic
perspective adopted by legislators encompasses two core objectives. Firstly, it encourages companies to operate
profit-oriented while upholding human rights. Secondly, and perhaps more intricate, legislators grapple with the
imperative to effect cultural shifts within corporations, aligning with studies that attest to the positive impact of
gender-diverse boards on corporate performance and economies (Rioult, 2016).
In essence, legislators tread a fine line, aspiring to transform corporate cultures without instigating negative
economic repercussions in the short or long term. The ultimate challenge is to engineer a delicate equilibrium
that acknowledges companies' profit-driven nature and the imperative for fostering gender diversity within
corporate boards.
Contrary to the prevalent viewpoint, gender quotas are not the exclusive avenue for establishing gender diversity
in corporate boards. While legislators have adopted quotas as a primary tool to prompt companies to foster
diverse boards, alternative pathways exist. Transparency and reporting rules, as articulated in the EU Directive,
exemplify such alternatives. Furthermore, akin to the German strategy, legislators can extend their focus beyond
the corporate realm, advocating for initiatives that bolster the biological dimension of diversity, such as
motherhood rights.
However, it is apparent that lawmakers are currently in need of a comprehensive array of alternative solutions
and diverse approaches to support board diversity, highlighting the need for further exploration and innovation in
legislative strategies. Therefore, there exists a notable gap in the legislative toolkit, indicating the necessity for
exploring and introducing novel approaches that can complement and enhance existing efforts to foster diversity
in corporate boardrooms.
