Boardroom quotas for women: the EU gets it wrong again

EU commissioners will this week debate proposals that would force quotas for women on corporate boards. The “Justice Commissioner” of the Evil Empire Viviane Reding (an ugly old trout with zero business experience hailing from that hotbed of tax evasion Luxembourg) wants to make it mandatory for companies to reserve 40% of seats for women. Assuming that this bunch of losers agree to the plan (they will) then another bunch of losers (the MEPs) will then push this law forward across all member states. Where do you start on this insanity?

Europe is heading into a short and long term economic slump driven by: excessive Government spending, unsustainable deficits, excessive regulation, uncompetitive wage structures and employment law and demographics. Europe is heading for bankruptcy. There are real issues for the Evil Empire to tackle. Not only is this not one of them but ithis positive discrimination is utterly counterproductive.

I accept that only 15% of board positions in EU member states are held by birds. But that is a generational thing. I am indebted to a young student writer (Victoria who blogs here and seems very switched on indeed)who points out that in the past decade the number of privately owned companies started by women in America has increased twice as fast as the number owned by men.” In Britain, 58% of all undergraduate degrees are now received by women. From the 1960s to now, we’ve seen the number of women who are going on to be barristers or medics, double. In other words as an increasingly well educated female workforce works its way through the ranks the number of women on boards will increase. It will do so in merit. That is as it should be.

What the Evil Empire proposes is that we should just increase the number now through quotas. This is obviously bad news on so many fronts.

Least of all is that this is another law to enforce, requiring more officials to enforce it. Countries running unsustainable deficits (like almost every member state of the Evil Empire) cannot afford this.

Secondly, if there is a dearth of talent in the current generation of senior female managers/directors it will lead to companies appointing either “token women” who are ignored on key decision making issues or women who are taken seriously but are just not very good. How, exactly does that help anyone? The quota-appointees either weaken the board or they simply add to a PLCs cost base. That is bad news for both employees and shareholders, of whom about half are likely to be …women.

The useless old trouts who will be installed to make up quotas will not let go easily. They will hang onto well paid sinecures for as long as possible (so blocking the promotion of genuinely able women).

And so an economic block facing appalling issues is wasting its time debating an issue that will be solved by demographics anyway. But unable to wait for a meritocracy it imposes a system that is not merit based and will damage shareholders and employees across the continent ( half of whom are women) and will block the career prospects of genuinely able women in the years to come while ensuring gravy all round for a small group of women ( some of whom are capable and others who are not – just like men) right now.

Back in Albania with its 10% flat tax rate, no daft legislation of this sort and outside of the EU the economy continues to grow. I think once again about redomiciling to live near Butrint.