Commissioner Reding reminds public companies that they must rapidly increase the number of women on boards or face regulation
[Brussels, 01 July 2011] Women in leadership positions are an issue high on the EU agenda for months, and a topic of which Viviane Reding, Commissioner for Justice, Fundamental Rights and Citizenship, has been vocal in her support. At a conference in Berlin, Ms Reding reminded European companies that they have less than a year to voluntarily commit to and sign the "Women on the Board Pledge for Europe". In case companies fail to achieve the expected results, Commissioner Reding recalled, she will introduce a quota proposal to increase the number of women on boards of publicly listed companies to 30 per cent by 2015 and to 40 per cent by 2020.
The goal to have an equal share of women and men in leadership positions has been on the political agenda for the last months not only in Germany, but also in other Member States. Recently the Netherlands, Italy and Belgium adopted quota proposals for women on boards of companies. Several other countries have started discussing the measures that could be taken in order to achieve better gender equality.
In Germany, according to the Commission press release, the proportion of women on boards is 2.9 per cent, only 0.4 percentage points higher than 2006. With this pace we will need more than 50 years to achieve equality, Commissioner Reding says. The strong commitment that Ms Reding declared at the conference "Share of women in leadership positions - strategies at European and national level" is a clear sign that the EU acknowledges the importance of equal participation of women and men in decision-making.
Studies show a positive relationship between the proportion of women in boardrooms and corporate success. According to a study of McKinsey, the companies where women are most strongly represented at board or top-management level are also the companies that perform best. Their operating profit can be up to 56 per cent higher than that of those businesses that were exclusively run by men [1] Moreover, boards of directors with a higher proportion of women achieve better results in audit and risk control, compared to a board with only male executives.
[1] McKinsey & Company (2007). Women Matter: Gender diversity, a corporate performance driver. Available at: http://www.europeanpwn.net/files/mckinsey_2007_gender_matters.pdf
