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By Tim Montgomerie
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Yesterday we published Mark Fox's review of the new book – Masters of Nothing – by Tory MPs Matt Hancock and Nadhim Zahawi. As Mark blogged, the book is wide-ranging in its scope but one recommendation has caused a little bit of controversy. They recommend that company boards should be compelled by law to have 30% involvement by women if they do not voluntarily reach this target themselves. The Mail on Sunday reported that George Osborne was sympathetic to the idea.

In an article for today's Telegraph another two Tory MPs – Dom Raab and Priti Patel – describe mandatory obligations as "regressive and counter-productive". While acknowledging that a more diverse board can increase a company's competitiveness they also quote research which shows that mandatory quotas can also damage shareholder value if insufficiently experienced directors are appointed. Raab and Patel write:

"In a meritocracy, businesses should recruit individuals based on talent and hard work, not "tick-box" social criteria. Positive discrimination undermines the principle of equal opportunity – because it makes some more equal than others. It can be bitterly divisive for colleagues to be passed over because of their gender, not to mention counter-productive. As Julie Meyer, an entrepreneur on the panel of the online version of Dragon's Den, argues: "If you're [on a board] because of a quota, your voice will be neutered and your advice won't be heard.""

I agree with Raab and Patel. Once a Conservative-led government has introduced mandatory quotas for diversity of gender we'll be in a weak position to object to Labour governments legislating for mandatory union involvement on company boards, for example. Companies don't need this micro-managing and it can produce perverse results. Sir Robert Wilson, chairman of the BG Group, has, noted Raab and Patel, pointed out that a 25% target "would require 100 per cent female appointments at his company for the next three years".

By way of footnote the book launch for Masters of Nothing was addressed by five people – all of them men! My sources tell me that about 85% to 90% of the people attending were also men. Just saying.

12 comments for: No thank you to mandatory quotas

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