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EU agrees 40% quota for women on corporate boards

Graham Watson

8th June 2022

The EU has introduced legislation to increase boardroom diversity, by insisting that companies will have boards with women making up 40% of all board members.

The question is "Is this good economics?" You'd need to weigh up the opportunity costs, and law of unintended consequences too. You might argue that a lack of progress has driven the need for legislation, but is legislation the right mechanism for driving change?

And further, is the issue of gender imbalance the most significant issue that requires tackling? I suspect that in order to meet the requirement, firms will employ people from a particular social class, and this will do little for increasing diversity in its broadest sense.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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