Should GCC countries impose quotas for women in leadership?

Can quotas for women in senior roles help redress the gender imbalance in decision-making?

In the Gulf Cooperation Council (GCC), gender diversity is fraught with many challenges. From public policy to private sector engagement, each country within the GCC has its own goals and interests when it comes to supporting women in leadership roles. Engagement differs across countries, industries, and the size of organizations.

This suggests that many businesses may be missing out on significant growth potential derived from having a diverse workforce.

In the UAE, in particular, female participation has gone from 34% to 46% between 2000 and 2014, according to the recently release report by The Boston Consulting Group (BCG).

According the report, gender inequality creates an average global income loss of 13.5%, which can be divided into losses due to gaps in occupational choices and losses due to labor force participation gaps. What this means is that the world at large is losing out on female talent in sectors where its needed the most.

This figure is the highest in the Middle East and North Africa at 27%. In other words, championing and investing in women in these nations can boost the region’s income, and ultimately prop up the global economy.

Since 2000, almost all the GCC countries have experienced a significant improvement in women’s participation in the labor force. The UAE, in particular, has gone from 34% to 46%; however, what has come to the fore is that the increase in women’s workforce participation, in the UAE, has been accompanied by an increase in the female unemployment rate.

This is partially driven by the fact that more women are securing higher levels of education ; a mismatch with the job opportunities in the labor market.

So what can businesses do about this underutilized resource?

According to Dr Leila Hoteit, Partner and Managing Director at BCG Middle East, it starts from the top. To develop and empower the female leaders of tomorrow, CEOs and senior leaders should integrate gender diversity as a core part of the organization’s strategic objectives and ensure organization-wide communication and engagement, she says.

Bigger organizations in the GCC have been leading the charge when it comes to championing female employee retention. Some of the strategies commonly employed by these businesses include  flexible work schemes for female employees.

“In particular, the commitment of middle management will be critical, as that is who engages every day with employees, and is responsible for performance assessments and promotions.”

This is to tackle an issue familiar to most women around the world; that of balancing work and domestic responsibilities. Globally, women still manage the lion’s share of household responsibilities, including child rearing. The impact of this in the corporate world has been a weak middle; where mid-career women increasingly opt out of the rigid 9-to-5 workforce to focus on domestic responsibilities.

According to BCG’s report on the topic, however, even the strongest flexible work policies and robust returnship initiatives for working mothers re-entering the workforce after maternity leave aren’t enough to attract and retain women in the GCC labour market.

In many GCC countries, cultural biases still prevail, according to the report. Women are perceived as unsuitable for some jobs or positions.

Attracting, retaining and promoting female leadership can be an uphill struggle in an environment that may still cling to gender stereotypes that work against women. This is where adopting targets or quotas could help challenge preconceived notions and push the agenda against the bias barrier.

The decision to impose a quota can be a contentious one. Looking back at the global income loss for gender inequality, Europe had the lowest figure, at 10%.

As early as 2003, Norway introduced a quota for women, having noted that career growth for the large majority of women tapered off at that mid-career point. This quota system required all public companies fill at least 40% of their board seats or risk being dissolved.

Over the last decade, Iceland, Spain and France joined the quota club, introducing 40% targets to public companies. Most recently, Germany became the largest European economy to introduce a quota, requiring women to comprise 30% of supervisory board seats in public companies.

The effectiveness of quotas is still up for debate. Skeptics believe that quotas are against the principles of meritocracy and equal opportunity for all. Concern lingers whether enforcing quotas would mean women are hired or promoted because of their gender and not for their qualifications or merits.

Supporters argue that the goal of quotas is to “force the hand”; to actively break through the glass ceiling so that more women make it through the pipeline to decision-making positions.

Having women at the top, particularly in industries that are traditionally male dominated, can challenge cultural biases, and motivate young women upon seeing relatable, successful female role models.

More tangibly speaking, women leaders can steer the hiring and promotion of women in their companies, cutting through unconscious biases that stop talented women from entering organisations to begin with. Once that’s set in motion, in theory, it’ll form a virtuous cycle, evening out the gender imbalance along the way.

Does this pan out in reality?

The Norwegian example suggests that quotas could work, but it’s a long game. Back in 2003, 30% of working women in Norway were in managerial roles. In 2015, this figure rose to 37%.

In the UAE, for example, the Cabinet enacted a law requiring listed companies and government agencies to reserve at least 30% of their board seats for women in 2012. This decision aligns with the UAE’s vision for sustainable socioeconomic progress.

The late Sheikh Zayed Bin Sultan Al Nahyan often stressed the importance of equal representation for women.  “Nothing could delight me more than to see [a] woman taking up her distinctive position in society … Nothing should hinder her progress … Like men, women deserve the right to occupy high positions according to their capabilities and qualifications.”

Ultimately, the need and success of implementing gender-based quotas will depend on each government’s beliefs and national priorities. Considering the far-reaching and lasting impact women in leadership can have on society at large, the numbers alone make the case for gender diversity becoming a global priority.

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