Journal of Business Ethics

, Volume 133, Issue 3, pp 395–419 | Cite as

Strategic and Regulatory Approaches to Increasing Women in Leadership: Multilevel Targets and Mandatory Quotas as Levers for Cultural Change

Article

Abstract

While substantial evidence is emerging internationally of positive increases in the participation of women on company boards, there is less evidence of any significant change in the proportion of women in senior executive ranks. This paper describes evidence of positive changes in the number of women on boards in Australia. Unfortunately these changes are not mirrored in the senior executive ranks where the proportion of women remains consistently low. We explore some of the reasons for these disproportionate changes and examine the likely effect of the recent amendments to the Australian stock exchange’s corporate governance code designed to improve gender diversity both on boards and throughout organisations. Based on the early corporate response to these regulatory changes, it is interesting to consider whether Australia’s approach in promoting voluntary self-regulation at the corporate level may be as effective in the long run as the emerging trend in Europe to apply legislated quotas for female corporate board representation. Interview evidence is presented suggesting that the primary reasons for the lack of women in leadership are not simply lack of opportunity at the apex of the corporation, but issues at mid-management level that are unlikely to be resolved by mandatory board quotas. In some circumstances carefully monitored voluntary targets may be more effective at promoting cultural and strategic change at the heart of the corporation. In summary, mandatory quotas (set through hard law usually with sanctions for noncompliance) may achieve early and significant results in terms of female board representation. However, voluntary targets for women’s participation on boards and in executive ranks (proposed in soft regulation such as corporate governance codes and set as part of corporate strategy) may promote more effective cultural and practical change in support of greater representation of women in leadership.

Keywords

Gender diversity Women in leadership Corporate governance Equal opportunity Cultural change Regulation 

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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  • Alice Klettner
    • 1
  • Thomas Clarke
    • 1
  • Martijn Boersma
    • 1
  1. 1.Centre for Corporate GovernanceUniversity of Technology, SydneyBroadwayAustralia

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