I remember standing in Oasis with my sister in August 2008, looking at a shirt-dress that I really liked. I put it back on the rail. “There’s a recession coming,” I said to my sister. She had heard the same. We didn’t take it too seriously though, how bad could it really be? A month later, Leehmans collapsed, at the beginning of what turned out to be the implosion of the financial world.
I remember in January 2009, driving home from work with my husband, wondering how we’d been so shortsighted as to continue working in the same industry – we were both in financial services. The funds world was cracking and shaking in its foundations – what would happen if we both lost our jobs? What if we couldn’t pay our mortgage? Surely the bank wouldn’t put us out on the street I thought. That couldn’t happen, could it?
We all know what happened then – businesses shut their doors, estates were left for ghosts, and people really were put out on the street. It’s still happening today, in spite of the green shoots of the recovery all around us.
That’s the Irish version. The US side of the story is played out in The Big Short, the film starring Ryan Gosling, Christian Bale, Steve Carrell and Brad Pitt, that’s currently showing in cinemas. It’s glossy, smart, funny, and very adept at explaining exactly what happened with the subprime mortgage market in the States, and how it led to global economic meltdown. It’s also searing in its message – arrogant, greedy, short-sighted men took huge financial risks and made incredibly bad decisions, then all of us paid for it. And none of them were held to account. Arrogant, greedy, short-sighted men. Because that’s exactly what we saw on screen – men. And this too is a reflection of reality. In 2008, women held just 15.2 percent of directorships at Fortune 500 companies. And in 2009, The Guardian identified 25 people – bankers, politicians and economists – who were responsible for the credit crunch – just two of those were women.
What if there had been more women in those boardrooms? Would the same decisions have been made? Or would there have been a reining in? Would different decisions – in some cases – have been made? This isn’t stereotyping. Numerous studies show that companies whose boards have more gender diversity tend to perform better, and when the question of “why” comes up, the answer appears to be that women are less likely to take risks and make big decisions without having all the information.
Professor Aaron A. Dhir of York university carried out a study of Norwegian directors to look at the impact of gender quotas there, and in an article for the Atlantic about his findings, he writes, “According to the participants in my study, the heterogeneity brought about by quotas has enhanced the quality of boardroom deliberations and overall corporate governance. The directors I interviewed believed that women were more likely than men to thoroughly deliberate and evaluate risks. Women, in their view, showed a greater propensity to monitor firm management.”
Quotas also forced corporations go to outside their usual networks to find suitable candidates, leading to less homogenous, more heterogeneous boards, and heterogeneous boards tend to come to better solutions.
The last time I felt like this was after Anglotapes – remember that? No female voices on those tapes. I couldn’t help wondering if it would have been different if there were. And that’s the sense I got after watching The Big Short too. Where were all the women and would it have been different, if say, 30% of every board was female? Maybe not, and there’s no way to know for sure, other than giving it a try.
I’ve never been able to come fully on board with the idea of gender quotas in business. Yes absolutely for elections, because it’s just about getting on the ticket – after that, it’s up to voters. But in business, I’ve always wondered if quotas are detrimental to women in the long run. Would quotas mean that every woman who succeeds in business is judged – is there a question mark over her head? Is she there on merit or because there was a legal requirement for a woman to fill the position?
But I think now I’m over the line. Even if it’s a quick and dirty solution, even if it puts questions marks over women’s abilities, even if it’s not the ideal answer, gender quotas in business are probably the only answer we have right now. Not just for women, who are otherwise stuck beneath glass ceilings, but for all of us, who don’t need another global economic meltdown. We need female voices in boardrooms not just for women, but for everyone.