Balancing act - European Women's Lobby

pm april 2012

Binding legislation is the only way to increase female representation on company boards, argues Cécile Gréboval Commission vice-president for justice Viviane Reding’s announcement of possible EU action to address the women’s underrepresentation on company boards has created a lively debate about the pros and cons of quotas. The evidence shows, however, that there is only one way forward if the European commission wants to women and men to be equally represented on boards of European companies: binding legislation. The findings of the European Women’s Lobby’s (EWL) progress report on women on boards, published in February 2012, and the commission’s latest analysis reveal that most progress over the past year towards parity was made in France, where quota legislation accompanied by sanctions was introduced in 2011. Radical change throughout Europe requires decisive action also at EU level. The commission must seize this unique opportunity to ensure modern, efficient and diverse economic decision-making and propose an EU directive on parity in boardrooms. This is a question of credibility in the eyes not just of women, but of men: 75 per cent of Europeans favour quotas, according to a recent Eurobarometer poll. The EWL’s assessment of national level initiatives to open boardroom doors for women teaches us important lessons on how the possible EU-level legislation should be shaped. First, targets must be ambitious, as women’s representation rarely increases beyond the thresholds set. For the EWL, the just outcome is an equal representation of women and men. At EU level, the ultimate target should be set at 50 per cent representation of each sex by 2020, with mid-term targets to ensure that the final goal will be reached in due time. Secondly, only quotas with effective sanctions deliver desired results. In Spain, five years after the adoption of a non-binding 40 per cent target for female representation by 2015, women account for only 11 per cent of board members, and the target will not be met without additional measures. EU legislation must impose strong sanctions, such as those in place in Norway. Thirdly, the commission should propose additional measures to increase the number of women CEOs. In Norway the quota law of 2005 made boardrooms more gender-balanced, but the number of female CEOs did not increase and is still below EU average. Specific attention must also be paid to women’s representation in executive boards – the real holders of authority. EU legislation on parity on boards should cover a large number of companies. While large companies show modest progress, women’s representation on the boards of smaller companies is lagging behind. The EU quota should apply to private companies with more than 50 employers and to all public companies. Introducing EU legislation for more equality at the highest level of economic decision-making would have both a concrete and symbolic impact. However, it is only one part of the equality equation: a broad range of action is needed to achieve equality between women and men and, as a consequence, a striving European economy. Improving the situation of all women, also those who are not (yet) in the position to sit on boards, is all the more important during these times of uncertainty and change. Progress with the revision to the maternity leave directive – with full pay guaranteed as the European parliament has proposed – would fill the other part of the equation and have an immediate impact on the daily lives of millions of women. It would also ensure more equality and quality in employment and tackle some of the root causes for women’s underrepresentation higher on the ladder. Gender-balanced boards are the top of a pyramid, whose basis still needs considerable reinforcement. Read the whole article here.

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