Diversity Waylaid - New Dutch Laws on Boards and Commissions Defeats Purpose

Friday 30 March 2012, Amsterdam. It is afternoon, and the Rode Hoed debate centre is filled with well-dressed, distinguished looking people. They are here to listen to a debate organized by het Nationaal Register[1] on two recent amendments to Dutch law that limit the number of Commissions a person can be a – paid – member of.  I am there because I believe that the more women there are in board rooms and advisory Commissions, the better the chances are of equality between men and women in the work place. I am working with Stichting De Beuk to train women in leadership roles.

At the table are two national politicians, Ewout Irrgang of the Socialist Party (yes, his was the suit that was decidedly the most scruffy, and what WERE his pockets full of?), and Pierre Heijnen of the Labour Party (PvdA), and men (75%) and women (25%) Commissioners. The politicians are authors of two amendments to laws relating to boards and Commissions. The amendments were introduced to maximize both the number of Commissions a person can sit on, and the amount of money they can earn on a Commission. The idea was to break through old-boys networks  (we all know the stories of the interlocking board rooms, where all major companies in a country are run by the same sub-set of men), and to ensure that Commissioners have enough time to fulfill their duties to quality standards.  The amendments address management and supervisory boards of companies with more than 250 employees and public companies that are run on a commercial basis.

The amendments were introduced in response to persistent stories of poor governance in large companies. Everyone in the room can readily recall the ABN-Amro scandal earlier this century (the Supervisory Board was weak and did not intervene when needed) and the latest, the Amarantis scandal (huge Dutch education Moloch in financial dire straits because no one knew what the CEO was doing).  The tensions in the room became clearer as the event progressed. The SP politician denigrated the audience with the generalization “Modesty is not the greatest quality of the current generation of Commissioners”. The PvdA politician admonished the audience to do the work for free, just like the linesmen at the Little League do every Saturday.  The woman sitting to my right and the man to my left were clear: the politicians had no idea what they were talking about. My neighbors were hard working Commissioners, fully committed, who put in extra hours where needed, for little financial reward.

Professor Auke de Bos, of Erasmus University Rotterdam set the scene for the discussion with a few facts. His research shows that in the Netherlands, Commissioners are active in, on average, 3.5 Commissions and that these Commissions require on average 1.5 days per month of their attention. 13% of the men and 3% of the women have more than 5 Commissions. Some 18% of Commissioners are women. Some commercial enterprises offer €100,000 a year, some public institutions offer €5000 a year. On average, a position on a Commissioners is valued at €15,000 a year.

58% of the men acquire their positions via the personal networks – 42% of the women use their networks to acquire positions. 20% of the Commissioners responded to advertisements, and in 12% of the cases an intermediary was used. Women Commissioners are on average 10 years younger than their male counterparts.

In the course of the debate Commissioners pointed out the flaws in thinking behind the amendments. What struck me is that more and more women are choosing to leave their fulltime work while still in their 50’s, opting for a portfolio of Commissions. Drs Margot Scheltema was the financial director of Shell Netherlands when she decided in 2009 to become a full-time Commissioner and supervisor. She holds positions in commercial and cultural organizations. The amendment affects her bank balance in a way she had not anticipated when she left her fulltime position. She feels there are better ways of ensuring diversity – for example by maximizing the number of years a person can sit on a Commission. Drs Catherin van der Werf worked for 20 years as manager, director and CEO of public health organizations before choosing to concentrate on being a Commissioner. For her portfolio of organizations – all acquired via advertisements - she is available whenever needed and she has become an expert in strategic development in diverse social sectors. She can build bridges in ways that busy executives cannot do. She brings value because she is involved in so many organizations.

The amendments to the law will make it imperative for these women to relinquish some of their posts. This leaves me with the question: will the amendments have the opposite effect to their intended outcome? Will the small number of women who have chosen to be professional Commissioners be forced out of office? And did this message come across to the public policy makers - or was the contribution of these women to the debate another example of "Modesty is not the greatest quality of the current generation of Commissioners"?

More reading on the facts: Diversiteit in de raden van bestuur en raden van toezicht in de publieke sector

Lin McDevitt-Pugh

Lin McDevitt-Pugh MBA is a management consultant, project developer and manager in the public sector, private sector and civil society, based in the Netherlands. With a background in human rights and networking, she works with organizations to move the conversation from “This is not how it should be” to “This is how it will be”.

Lin gets very excited when she trains organizations in working with people as creative economic resources.  By mobilizing the resources we all have at our fingertips - the people we know and the people they know - we can create unique knowledge, build trust and access the people and institutions we need to access.
Contact: mcdevitt-pugh@netsheila.com

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[1] Although it sounds like a public institute, het Nationaal Register  (The National Register) is a recruitment and selection agency, and the event was organized to celebrate its 10^th anniversary.