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Fortune Magazine's annual Most Powerful Women list arrived on newsstands last week. With it comes inevitable chatter from the business press about who is in and who is out, who moved up a few notches and who has been knocked down a few pegs. And yet, perhaps what is most striking about the list is not the jockeying among the boldface names. Rather, it is the fact that even amid a lingering financial crisis that has highlighted poor governance and the scarcity of senior women at big corporations, the total number of women CEOs in the Fortune 500 is only 15, up from just two when the list debuted in 1998.
Indeed, at a time when women have gained more standing in politics and society, they have not made equal progress at the top of corporate America. Women comprise half of the workforce but hold only 16% of the board seats in Fortune 500 companies. More than 10% of those companies have no women serving on their boards.
In many countries, the numbers are even starker. Women hold approximately 12% of the seats on corporate boards in Germany, the United Kingdom and France. In China, women hold 8.5% of board seats; in India, that figure is 5.3%, and in Japan, only .9% of directors are women, according to data compiled by Catalyst, a nonprofit group seeking to expand opportunities for women in business.
Efforts to change this, however, have been under way for several years. Norway in 2003 passed a quota law requiring that by 2008, 40% of all board members at state-owned and publicly listed companies had to be women. Today, women represent 37.9% of corporate boards in Norway, according to the European Professional Women's Network. Other countries, including Spain and the Netherlands, have passed similar laws.
But while quotas accomplish one very big goal, they have unintended negative effects. For one, companies looking to appoint new board members end up choosing from a smaller talent pool. Because the pool is narrowed, the candidates are less experienced. Second, quotas could perversely perpetuate discrimination; companies might purposely appoint less competent women to the board as tokens, but not take their views seriously. Instead, rules that encourage companies to foster diversity on their boards -- rather than coerce them into all looking the same -- may be a better way to get more women in U.S. boardrooms, experts say.