Northwestern study supports benefits of California gender-quota law

Bank+of+America+Corporation+members+testify+before+the+Financial+Crisis+Inquiry+Commission.+California+recently+passed+a+law+requiring+women+to+hold+seats+of+public+corporate+boards.

Source: Olivier Douliery/Abaca Press/MCT

Bank of America Corporation members testify before the Financial Crisis Inquiry Commission. California recently passed a law requiring women to hold seats of public corporate boards.

Neya Thanikachalam, Reporter

In an attempt to make management positions more available to women, California passed a law on Sept. 30 requiring women to hold seats on public corporate boards. The law, which is the first gender-quota law for public corporations passed in the U.S., is supported by Northwestern research that found companies with more women on boards had fewer layoffs during the 2008-09 recession.

Kellogg Prof. David Matsa and University of Virginia Prof. Amalia Miller studied how a 2006 gender quota passed in Norway affected corporate decision making.

In another study, Matsa and Miller found that women-run companies had higher rates of employee retainment during the recession. Though Matsa said this led to increased labor costs, there were potential economic benefits to avoiding downsizing.

“Downsizing decisions are difficult,” Matsa said. “They save a company money in the short run by enabling them to save costs, but in the long run, they could leave an organization a little flat-footed in trying to recover after the economy picks up.”

This strongly suggests women-run companies are more employee friendly, Matsa said.

For California state Sen. Hannah-Beth Jackson (D-19), this does not come as a surprise. Jackson wrote the California law, but she has been advocating for women’s rights for many years. She said she believes women bring a lot to the table, but they don’t always receive the credit they deserve.

“It is a question of life experience, perspective, and in many instances, we have these incredibly qualified women who have just been denied access to this leadership because they’re women,” Jackson said. “No other reason.”

Former IBM corporate development vice president Claudia Munce also said women continue to face obstacles in the workforce. As the founder of IBM’s Venture Capital Group and a member of four corporate boards and two nonprofit boards, she said she has had a lot of experience as a woman in a male-dominated world.

Munce said while the legislation passed in California is a step in the right direction, women should not forget to advocate for themselves.

“A lot has changed and a lot hasn’t,” Munce said. “More often than not, most women will say ‘Well, I’m not quite sure whether I want to take that job,’ while a man would just jump in and see what happens.”

Jackson also added that while she is glad her bill passed, she believes there are still issues that need to be addressed regarding gender equality in the workplace, including childcare for working women and the pay gap between men and women. She also wrote and passed one of the strongest equal pay bills in the country.

Jackson said she believes it’s unlikely that legislation regarding a gender quota will be passed on a national scale like it was in Norway, but she does think the California bill is influential.

“I don’t give a lot of credibility to the federal government to do much of anything, but I do think and believe very strongly that it has had a very positive impact nationally,” Jackson said. “With this bill, we really opened up the discussion.”

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