Women are taking place in listed company boards like never before and the increase is occurring at a record pace. As a recent AllBright report contends, if this development continues at the same rate, companies' boards will be gender equal in Sweden by the year 2025. However, 9 percent of companies have failed to recruit women to their boards. While the lack of women in top position has historically been explained as women being incapable, uninterested or unable to break rigid career barriers to reach leading positions, Thomas Chamorro-Prezumic from Harvard finds other explanations in a recent study. He says that we often mistake confidence for competence, perceiving overly-confident men as competent enough to lead while their female counterparts might be more qualified but not as likely to display the same type of “leadership traits” as narcissism and hubris. Thus, the systemic problem, Prezumic argues, rewards incompetent men – to the disadvantage of competent women. As a result, we all mis out. Furthermore, a study from Zenger Folkman with the telling name “Women Do It Better than Men” adds some more interesting facts into the mix: According to the extensive survey, women’s leadership skills excelled and were better rated in most categories compared to men’s.
In fact, a more equal divide between women and men in leading corporate positions correlates with better performance. In their recently released study from 2015, McKinsey finds that the current gender inequality poses a severe economic challenge for global growth. If we could decrease this inequality between women and men on the labor market, there would be great economic growth benefits to reap. According to the report, one potential scenario from taking measures against gender inequality could result in increasing the global growth to the equivalent of China’s and the U.S. economies size combined ($28 trillion), by 2025.
With the threat of a quota law just around the corner, Swedish listed companies might have to put in an extra effort to achieve gender-balanced boards much sooner. The Government has warned companies that if their boards do not consist of at least 40 percent women after shareholder meetings in 2016, they will present a proposal for a quota law to alleviate the current unequal board situation. To increase the proportion of women to at least 40 percent by 2016, 220 seats in boards now held by men would have to be replaced with women. This might be the last chance for listed companies to solve this problem and avoid law-binding regulations in the future.