Do we need gender quotas? Problem or solution?

In Sri Lanka we take pride in our women. Girls are educated on par with boys. Women are welcome in most careers and the pathway up in terms of promotions and achievements is open. 

Women dominate our professions, academia, and the judiciary. Over the years the Sri Lanka Institute of Directors (SLID) has initiated many discussions to try and understand why, despite the potential benefits there has been a remarkable lack of progress in the number of women directors on corporate Boards in Sri Lanka.

Can this be solved by introducing gender quotas? Or is the lack of women on boards a symptom and not the problem? Is it the consequence of the huge under representation of women at the top executive levels?The use of quotas is far from creating a consensus among people, neither among its potential beneficiaries, nor among the others.

As part of the SLID Power Evening series on Women on Boards had a lively and interactive discussion titled ‘Do we need gender quotas? Problem or solution?’ on May 31 on why there were less women in the corporate sector in Sri Lanka and whether we needed to introduce quotas and whether they should be voluntary or mandatory. 

Women on board programme
SLID Chairman, Preethi Jayawardena welcomed those present and delivered the opening remarks. He mentioned that over the years SLID has organized many forums such as this to discuss gender diversity on Boards but it did not result in any constructive solutions which led toour Immediate Past Chairperson, Shiromal Cooray to initiate the Women on Boards Mentoring Programme designed to create a supply of Board-ready executive women and to also link Board Chairs and CEOs with talented, capable, executive women to enable these two groups to actively engage with each other. 
He explained that in this regard, SLID was working together with the International Finance Corporation (IFC), member of the World Bank Group, to introduce a Women on Board Programme which will complement the Board Leadership Programme. We have identified and invited facilitators from both genders to attend the IFC Train the Trainer in June.

The discussion was moderated by Arittha Wikramanayake (Precedent Partner, Nithya Partners), whilst the panelists were Ranel T. Wijesinha (Chairman, SEC), Sharmini Ratwatte (Non-Executive Director, Ceylon Cold Stores PLC), AnarkaliMoonesinghe (Executive Director, CIMB Investment Bank (PVt) Ltd, and Deshal De Mel (Economic Advisor, Ministry of Finance).

The moderator posed questions to the panelists covering the problem, the causes, how it affects governance in the private sector, and whether this is something that needs to be fixed, and if it is, how the objective was going to be achieved.The panelists were forthright and shared their experiences and thoughts. The discussion was enrichened with the lively participation of the audience who also shared their views.

Gender or generational issue?
Aroshi Nanayakkara from the audience raised a question as to whether this was a gender issue or a generational issue as the younger generation are comfortable working with each other as they are growing up together, studying together and working together and don’t see the issue of why women should not be seen more at the Board level. Currently in Sri Lanka the majority of the Boards consist of 70+ year olds whereas the consumer is 20 plus years and employees are 25 plus years. She questioned whether this problem would get solved in a few years as the younger generation move into Boards and whether this issue of women Board members is a short term issue that we need to look at now.  Deshal agreed that his generation had more exposure than the older generation which helps being able to recognize and celebrate diversity. 

He agreed with Aroshi that his generation and future generations would be more open to and more welcoming of that diversity.Sharmini was of the view that we should encourage the conversation with the young men and women on how they share their duties when they become families and ultimately how we as a society want to operate. She hoped that the current scenario would change and agrees that too many of the older generation are hanging onto Board positions without moving out and giving the younger generation an opportunity to learn and lead these companies. Anakali commented that if it is generational we will have to wait another 20 years which is a long wait and it reinforces the idea that we do need quotas to give people a push. Ranel Wijesinghe agreed that it was a generational issue but didn’t think we have to wait 20 years as all it would take was for someone to start. He was of the view that it was partly generational but there can be change without quotas. He suggested that companies have Nomination Committees on Boards which included women because a Committee Chairman does not need to have all Board Directors.

Lack of environment 
A comment made by Nihal Fonseka from the audience was that the issue was that there was a limited pool of women at the board level although there are many at the entry level but over their careers for various reasons the number drops. It is not because of their competency but also could be that the company does not have the required environment to create the pool of Board ready women. The other is the selection process. The reality is that those who get appointed to the Board are people who are known. Nobody invites someone they are uncomfortable with to join a Board.He suggested that this is where SLID can make a difference and create the pool. He concluded that he didn’t think that quotas will solve the problem in practice as the person who is appointed through the quota will feel that they were brought in to tick a box. He said that there was a good business case to have women on Boards but it was for the men on Boards to realise that.

Kinita Shenoy posed a question to the panelists who opposed gender quotas. There have been a few studies that definitively proved that having women on boards is beneficial to good business. Why wouldn’t you want that for your company? At the end we are looking for gender equity and not equality. Gender equality means that everyone is treated the same ignoring the fact that women have unique challenges. Why would you not introduce gender quotas that would help women to face these unique challenges by giving them the opportunity to put a foot in the door to have a seat on the Board and later prove their worth?The moderator advised to be vary of these studies as they have mixed results and are not conclusive. 

In response to Kanita’s question, Sharmini stated that she is ambivalent on quotas but a few days ago prior to her research on this topic she was for quotas. But she realized that it was not going to work until the mindset changed. She went on to say that we have a bigger problem in Sri Lanka that unlike the Westwho tried the quotas and some countries are having issues, they realise that they have to work through somethings. We have to get our act together on the other side to make the quotas work and be successful.If we do it now we may get it wrong. We have some people in decision making who have a different attitude towards it and they are not going to create the space for it to work. We have to be careful on what we are asking for. She liked the idea of a voluntary quotaand suggested we recognise companies listed on the Colombo Stock Exchange who have made a pledge to increase the number of women and report the number they have at different levels of the organisation. We can have journalists commenting on it. She suggested that the Top 10 companies that have women to encourage companies to voluntarily create the space to build a pool of Board ready females.

Arittha shared that previously he too was for gender quotas but the more you think of it the more you realise that it could have the reverse effect. If you have quotas what would happen is that they would get the most passive female on to the Board just to meet the quota requirement. This will deprive competent women from getting on to Boards. We need to create a platform for women to shine and to be identified as being good Directors. He stated that this is not a feminist issue nor an equality issue but is for building better Boards which is the role of SLID.

Quota introduction
With regard to greater diversity being good for business, Deshal argued that then it should be determined by the market and not by the government. However, with regard to men and women in a company having different career opportunities due to their gender would be a reason for intervention because that is a result of market failure.A quota would make sense in that context.However, to solve this issue overnight is not possible and counterproductive. He suggested that we start with a voluntary quota and then in 2 years give an explanation as to why you have not achieved the quota and within 5 years if people are still not doing it then it would be when a mandatory quota should be introduced.If nothing is done the status quo will continue and change will be very slow. From a rights perspective 50% of the population are women and there is something fundamentally wrong if it is not reflected in some way in corporate decision making. 

Anarkali added that at the backbone of the economy is unskilled low income workers and if this is not representedat the Board level there is something wrong. 

Preethi Jayawardena, recounted his 40 years of his experience serving across over 15 different company Boards on how the Board should work and how they work are 2 different things. In most of the places the Chairman calls the shots and if he is pro-men the‘boys club’ is strong. He agreed with Deshal that we need variety but the men think we need diversity but least importance gender. The single most problem as the men think why women can’t break the glass ceiling is because of maternity. They think that maternity is not just the 3 months but includes pre-natal and post-natal period. If at the executive levels you can do without that person for such a long span of time, then you don’t need that person. The other problem is when a women gets to a senior level very rarely would another lady reach that position as she will try to suppress another lady. It does not happen in most of the cases with men. Unless we sort these things out we cannot move forward in this circumstances in his view we need quotas. 

Rajitha Jayasuriya commented that if men are the problem, then we need to address that issue first. It is an insurmountable task for women to move up the ladder as they have to be educated, balance families and children and play a role in the corporate environment as well asplaying a role in changing the attitude of men. It is a tough task and that the men in Sri Lanka can change their own attitude.

There are adequate women who can be on Boards and there are very educated and competent women but it should not be the responsibility of women to change the attitude of men. There are independent directors on Boards which is a result of it being mandated. She questioned as to whether these men think that they are on the Board just to comply with the requirement. If they don’t, why should women think that they are on a Board because of a quota requirement? She said that she is for quotas until there is a change in attitude of men in Sri Lanka. Once women have made their mark and their voices heard the quota can be taken away and will be the way people function.

Wrapping up
In conclusion the moderator requested the panelists to share their thoughts on what would be a solution. Deshal De Mel sated that it finally came down to 2 things. One is that diversity was better for companies but that is not a reason for quotas. We must also recognize that society has created structural differences in terms of challenges faced by both men and women. We should do everything to try and mitigate those. If this doesn’t result in more women on Boards then we will be compelled to introduce a gender quota.

Ranel Wijesinha was of the view that there was a lot that can be done but we do not need gender quotas. He believes that there is a pool of board ready women as an example he referred to the women in the room. Given that there is a check and balance in banks with the ‘fit and proper’ test which is gender neutral, he suggested as a first step to engage the Central Bank to encourage banks to use the ‘fit and proper test’ when appointing directors to ensure that the check and balances are in place.  

Anarkali Moonesinghe agreed that it was one way to address the concern but recommended that the ‘fit and proper’ test should not only be for banks but should be for everyone regardless of the gender which would address the issue of not having capable people.At the beginning a soft quota should be introduced to build the pool and also to get people to think of diversity below the boardthereby voluntarily committing themselves to diversity rather than it being forced. 

Sharmini Ratwatte was of the view that it was time for us to stop being myopic about this problem and do something about it. Over the past 30 years there has not been any change with regard to attitude of Corporates to make that change. A soft quota wasgood but it was important to report it and to also talk about it. She also stated that the younger generation must not lose out. She stressed that we must ensure that the 25 year old woman does not miss the opportunity to be in senior management or on a Board. How do we make that happen? She stated that it was the responsibility of both senior men and women to ensure that this occurs. The women need to push for gender diversity and men have to change their attitude. 

The closing remarks were delivered by SLID CEO Chamindā de Silva who thanked SLIDs annual corporate partners Stafford Motors, Certis Lanka Security and Allianz Insurance, annual print media partner Wijeya Newspapers and the participants for attending the event. The evening concluded with refreshment being served and the opportunity to network where further discussion on the topic continued.