Margareta Pagano: Quotas for women! Why their time has come

France's Finance Minister was set against forcing firms to put more females on their boards, but she has changed her mind – and with good reason

Madame Christine Lagarde has been a heroine of mine ever since she took on the bankers during the financial crisis, forcing the French banks to curb bonuses and thus taking pay to the top of the international agenda.

So it was a treat to actually chat with the French finance minister, albeit briefly, when she swooped into London last week to help campaign for woman power at the FT's conference Woman at the Top.

She's one of the few women I've seen who can wear dangling diamond earrings, a jewel-encrusted dress and high heels in the daytime without looking as though she should be at a cocktail party. Au contraire; Lagarde looked great, sounded brilliant and, what's more, admitted that she had completely changed her mind on one of the biggest issues of our day – a minimum quota for women on company boards.

After agonising for months, Lagarde told us why she has been persuaded that forcing companies to adopt quotas for female executives is the only way to get traction on what has proved to be an intractable situation. Even at the present rate of increase, she said, the gap between men's and women's pay will take 57 years to equalise; it will, at this rate, be centuries before more women break through to the highest echelons of industry.

That's partly why Lagarde now believes change must come from the top, citing President Nicolas Sarkozy's recent demand that half of all candidates for the Legion d'Honneur be women. But I suspect it's also out of sheer frustration. In her flawless English, she told the story of how, soon after becoming Finance Minister, she was approached by several of France's top chairmen, all complaining about how they really wanted women on board but just couldn't find enough of them. Lagarde drew up a list of 50 top-notch, highly qualified French and European women and gave it to the chairmen with the clear message – "I've found them for you, now do something about it."

So it's no surprise that she's backing France's new law on quotas, which in January goes for a final vote to require French firms to have women take up 40 per cent of all board seats, in five years. Just look at Norway, which has quotas, to see how well they work. And in Finland, firms with around 30 per cent of women on the board show a 10 per cent profits rise.

Like Lagarde, I've also always found the idea of quotas offensive, believing they demean women who want to be judged on merit, and that men would resent any "token" women. But I've also been converted after realising what a pure numbers game this is – and that the figures are so stacked against women that only intervention will bring change. Look back at the past two decades to see why; there have been numerous soft attempts by governments, head-hunters and the "male, pale and stale" boards to try to hire more women, but the numbers haven't really budged at all; about 11 per cent of all directors of FTSE 100 companies are women.

Egon Zehnder International, the search firm which helped the FT put together its ranking of the world's top 50 women, has come up with some stunning research which should persuade even the most cynical that the rules need to be changed. To start with, this shows that only 4 per cent of all directors in Europe are women, and, of those, only 28 per cent have "line management" experience in a big subsidiary or overseas. But, having such experience is a must if you want to make it to chief executive level. Thus, according to EZI, even women who have got to board level can't get promoted because they have been in the wrong jobs: most come from finance, marketing and HR. Can't blame the men for that.

By contrast, EZI's research also showed that nearly all the world's top female tycoons either run family businesses or have created their own empires – easier than working your way up the male hierarchy?

What's so interesting, though, is why, suddenly, the "women problem"– as one big City law firm put it recently – is suddenly so sexy. Two of the UK's most influential industrialists, Centrica's chairman, Roger Carr, and his Royal Bank of Scotland counterpart, Sir Philip Hampton, spoke up for more women on boards yet again last week, while Lord Davies is due to report back to the Prime Minister soon with his ideas on how to get more women to the top. And later this week a new book, Modern Muse, by Everywoman, is being launched, which claims that young women need more business mentors if they are to get on. This new mood reminds me of how the green campaign suddenly shot to the top of the agenda. Call me cynical, but I can see two reasons for this; fear and PR. The City's latest combined code gives companies a couple of years to improve diversity before they are forced to, while the EU is threatening to introduce a 20 per cent quota.

But both Carr and Hampton are against quotas. Carr told me he hopes aspiration rather than legislation will bring about change, while Hampton can see the virtue of quotas for non-executive directors. But he thinks we should wait to see if things improve over the next few years before moving to fixed quotas across the board.

But why wait? Lagarde cited the Burmese opposition leader, Aung San Suu Kyi, as a model of feminine values that would help enhance companies' performances – values of persistence and an ability to reach out to others, including the generals who locked her up. If everybody believes that having more women on board is better for everyone, why do we want to keep half the population under house arrest?