Posts Tagged ‘Women Directors’

Status of German women directors degraded to be “quota directors”

November 27, 2014

German companies have a reputation for excellence. But this is being sacrificed for the sake of political correctness. Currently every woman company director in Germany can be assumed to be of exceptional competence. When a new quota law goes into force in 2016, every woman director in Germany will be nothing more than a “quota employee”.

Discrimination to fight discrimination is an invitation to failure. I do not find any case of “affirmative action” – which is a euphemism for introducing a new, institutionalised and unjust discrimination ostensibly to correct the effects of some other unjust discrimination – which has actually achieved its objective. No program of enforced quotas has yet succeeded in achieving a condition where the “affirmative action” becomes unnecessary because the original injustice has been eliminated. Quotas or confiscation and rationing, enforced by the state and based on irrelevant criteria, remain a favourite tool of those with socialistic aspirations. But not only don’t they work, they also perpetuate the “injustice” that they are intended to correct.

Fifty years of quotas for the “scheduled castes” in India have only become entrenched and have been counter-productive. Rather than ensuring that the lot of the “disadvantaged” groups have improved such that they can compete fairly for jobs or education places, the “affirmative action” has instead ensured that competence and ability have been removed as requirements for selection. Even worse, the “system” is self-perpetuating and encourages the reduction of standards. Those who were to be helped now only need to be the “best of a bad lot” to be selected. Instead of raising standards, “affirmative action” allows and enables lower standards to become “acceptable”. To be classified as a “scheduled caste” has now become a path to privilege.

The experience  in the US with reservation of places in education and in the work-place for minorities has been no different. Even after over 25 years of “affirmative action” the SAT scores of African-Americans admitted to the top US universities remains significantly lower than the average of all those admitted. But this is only to be expected. Effectively the SAT scores to be targeted by aspirants for admission have been reduced for those qualifying for the privilege. Aiming high has no longer any value. Reserving jobs for women or Latinos or other “disadvantaged” minorities has only succeeded in lowering standards but – what is worst – also in making these lower standards acceptable. The quotas for the employing of ethnic Malays in Malaysia has removed any incentive for such “quota employees” to excel at anything other than being Malay. Quota students or quota employees are not burdened by requirements of superior performance or competence – let alone any expectations of excellence.

It should be obvious by now that I believe that quotas based on having an irrelevant characteristic are counter-productive and contribute to equalising standards only by lowering them. Even when quotas try to bring in minimum qualification requirements, it is inevitable that the criterion becomes being “just good enough” and not “to be best”. The use of quotas automatically and inevitably downgrades the quest for excellence. It is settling for the mediocre.

So I am not very impressed by the new German law which will now force the largest companies to have women constituting 30% of their supervisory boards from 2016.. Again the justification is that it will be a trigger for social change and anyway that there are enough women who are qualified. That misses the point. Women directors for these companies have now been effectively degraded to become quota directors – even where they are there for their competence. They can no longer claim to be the “best available” even if they are. Angela Merkel has had to give in to the socialists on this point. Forty percent of the German cabinet is women. Angela Merkel herself is there because she was the “best” for the job. But note that many of her female cabinet colleagues are there not because of their competence or excellence but only to fill an unwritten quota. Other countries are also considering quotas for women directors – not least in “politically correct” Sweden. For example, I observe when I watch Swedish TV – which is very politically correct – that it is easy to discern when a female presenter or a news reporter has been selected to fill some gender quota rather than for her excellence.

But why stop at women quotas? Why not quotas also for other minorities and abandon excellence or competence? Why should women be more privileged than some other disadvantaged minority? Is the disadvantage suffered by women more important to correct than the disadvantage suffered by a gay person? or an immigrant? Perhaps there will come a day when a German Supervisory Board will have to be at least 30% female, 10% gay, 5% transgender and 15% of immigrant origin! That will be the time when I shall sell any German stocks that I might have.

As an investor in any company I would prefer that the Directors be the best available and affordable and not “just good enough” to fill a compulsory quota.

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