Case Study Italian Board of Directors “Pink Quotas”

The Wall Street Journal reported that in Italy, compared to other industrialized countries, fewer women work, especially in high level corporate positions. Italy has the second lowest level of women in the workforce in Europe, next to Malta. In Italy, 46.5% of the women between the ages of 15 and 64 work, compared to a European average of 58.5%.The Wall Street Journal noted that the low Italian average was partly for “cultural reasons” as well as for the fact that Italian law makes it difficult for women to work part-time, and thus many women leave the job market after having children.

The Italian government, however, is trying to reverse that situation by a new law that requires Italian listed and state-owned companies to ensure that one-third of their board members are women by 2015. Presently, only about 6% of corporate board members in Italy are women, and this low rate of participation is one of the lowest in Europe. Also, at the end of 2011, the Wall Street Journal reported that 48% of Italian companies at all male boards. A female member of the Italian parliament, who co-authored the law, said that the country thus needed a “shock to the system,” and she also stated her hope that the law would produce a “cultural change.” The law is part of a European effort to get more women into corporate boardrooms and executive positions. In the Northern European countries, such as Finland, Sweden, and Norway, women to play a large role in corporate life; but the rest of Europe lags behind the United States regarding women’s participation. In the U.S., 16% of board members are women, compared to an average of 13.7% in the European community. The EU figures are higher, however, due to the Scandinavian countries. Currently, the European Commission is deciding whether to make female board quotas mandatory for the entire European community.

The Italian legislation, the Wall Street Journal reported, is starting to encourage change. For example, Fiat, Italy’s largest car manufacturer by sales, appointed in 2012 two women as members of its board of directors, and for the first time in the company’s 113 year history. A principal goal of the law is for it to serve as a stimulus for working women as well as a means to force companies to think about women for high-level positions. Pursuant to the new law, companies that do not comply will face progressive sanctions, including fines of up to 1 million euros (about $1.25 million). However, there are critics of the new law. They assert that the law is an affirmative action policy aimed at gender equality but one will harm business by further curtailing the traditional business prerogative of hiring people solely on merit. Moreover, critics assail the law by declaring that it interferes disproportionately with the freedom that companies and shareholders traditionally have had to organize and run their affairs. Yet, in Italy, supporters of the law counter, the law was the only way to prevail over cultural barriers and to bring about needed change.

Bibliography: Zampano, Giada, “Italy to Push ‘Pink Quotas,’” The Wall Street Journal, June 6, 2012, pp. B 1, 7.

Questions for Discussion

: 1. Would such an Italian “pink quota” law be legal in the U.S. pursuant to constitutional principles and the Civil Rights Act? Or would it be illegal “reverse discrimination”? Why or why not?

2. What would some of the cultural factors be that might inhibit the participation in the workforce in Italy? How does one go about changing cultural norms?

3. Is the Italian “pink quota” law moral pursuant to Utilitarian ethics? Why or why not?

4. Is the law moral pursuant to Kantian ethics? Why or why not?